[Congressional Record Volume 150, Number 103 (Thursday, July 22, 2004)]
[Extensions of Remarks]
[Page E1499]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF THE AMERICA SAVING FOR PERSONAL INVESTMENT, RETIREMENT 
                     AND EDUCATION (``ASPIRE'') ACT

                                 ______
                                 

                        HON. PATRICK J. KENNEDY

                            of rhode island

                    in the house of representatives

                        Thursday, July 22, 2004

  Mr. KENNEDY of Rhode Island. Mr. Speaker, I rise today to join my 
colleagues Congressmen Ford, Petri, and English in introducing the 
ASPIRE Act, which presents new hope for extending the American dream.
  The ASPIRE Act--or America Saving for Personal Investment, 
Retirement, and Education--renews our commitment to ensuring 
opportunity for every child. This Act is in keeping with our 
government's long-standing tradition of expanding opportunities for 
each generation of citizens. It upholds the tradition of the Homestead 
Act, which in the nineteenth century sought to create opportunity 
through land ownership. It is in the same spirit that, in the twentieth 
century, we created universal public education--and then opened up 
access to higher education through the GI Bill and Pell grants.
  Living up to our goal of ensuring opportunity requires a new 
strategy, one tailored to the information age. In the twenty-first 
century, opportunity is tied to ownership. And yet we see today glaring 
disparities in the distribution of assets. A huge gulf exists between 
those who have ready access to asset-building tools, and those who do 
not.
  If we are to make good on our promise to America's youth, we need an 
honest new effort to broaden ownership of assets. We need to make 
savings incentives universal, rather than reserving them exclusively 
for the wealthy and middle class. The tax deductions we currently use 
to incentivize savings disproportionately benefit those in the highest 
tax brackets, not those who need the most help.
  By creating universal ``KIDS accounts,'' the ASPIRE Act will give 
every child born in this country a real stake in the future. Under the 
program, every child's account will be credited with an automatic $500 
seed contribution at birth, supplemented by up to an additional $500 
for children living below the median income.
  These accounts will be invested in a system like the Thrift Savings 
Plan for federal employees, giving kids and their parents a range of 
indexed investment options, from government bonds to international 
stocks. The accounts will be able to receive up to $1,000 each year in 
private voluntary contributions. Children in lower income families will 
receive dollar-for-dollar government matches for annual contributions 
of up to $500. As in Roth IRAs, the growth of account balances will be 
tax-free.
  When children turn 18, thanks to compound interest, they will have a 
real nest egg that they can use for higher education costs, save for 
future home-ownership, or save for retirement. They can then chose to 
maintain their accounts within the ASPIRE Fund, or roll them over to 
private financial institutions.
  Some will criticize universal savings accounts as too ``big 
government'' or too expensive. But let me tell you, we subsidize asset-
building in a very big way already--70 billion dollars each year for 
the homeowner's mortgage interest deduction and 150 billion for 
retirement accounts like IRAs, just to name two. Contrast this with the 
seven billion dollars per year it would take to bring savings to every 
American. That's less than 3 percent of what we currently spend 
subsidizing savings and investment for middle class and wealthy 
Americans.
  Universal KIDS accounts will go a long way toward the creation of a 
true stakeholder society. They will enable millions of young Americans 
to gain access to higher education. They will put homeownership--the 
cornerstone of Americans' financial stability--within reach of millions 
more families. And they will put every young American on track for 
developing retirement savings.
  Consider that a child receiving the full $1,000 seed contribution, 
contributing as little as $250 per year to an account earning 7 
percent, would hold an account worth $21,480 by her 18th birthday. By 
the time this individual reaches age 65, the account balance would grow 
to over half a million dollars.
  We know from experience that incentives like matching contributions 
can help lower-income families save. Evidence provided by individual 
development accounts as well as 401(k) plans clearly points to the 
success of these strategies. In addition, international models 
demonstrate the feasibility of a universal accounts program. This is 
the so-called baby bonds idea that Tony Blair has instituted in Great 
Britain, and if they can do it there, we can do it here in the United 
States.
  Think about the way that universal accounts would transform the 
outlook of young Americans. A new generation, assured savings accounts 
at birth, would cultivate a savings habit from a young age. These kids 
would grow up knowing that they own something, getting quarterly 
statements. KIDS Accounts would encourage a new culture of increased 
financial literacy, which is critical for enhancing one's prospects in 
a society where ownership equates with opportunity. Your lot in life 
shouldn't depend on your parents' paycheck. KIDS accounts would give 
every child in the United States a real stake in the future, and a 
reason to dream.
  I want to point out, Mr. Speaker, that this bill is both bipartisan 
and bicameral, with Senators Santorum and Corzine introducing a 
companion in the other body. I hope that the breadth of our initial 
supporters will foreshadow a wider embrace of this legislation that 
truly transcends party lines.
  I want to thank my colleagues from both parties and both chambers for 
the hard work that has gone into thinking through details of this 
effort. And special thanks are due Ray Boshara and Reid Cramer at the 
New America Foundation, who have provided much of the intellectual 
foundation underlying this important step forward.
  Mr. Speaker, too often our policy innovation falls victim to our 
partisan acrimony. If we are to preserve the universal opportunity that 
has been the hallmark of America for two centuries, we need to get 
beyond stale ideas and ideological blinders and embrace new ideas for a 
new age. I'm proud to join my friends today in introducing the ASPIRE 
Act and look forward to working with colleagues on both sides of the 
aisle to reinvigorate the American dream.

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