[Congressional Record Volume 152, Number 109 (Thursday, September 7, 2006)]
[Senate]
[Pages S9122-S9124]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA (for himself, Mr. Lautenberg, Ms. Stabenow, and Mr. 
        Obama):
  S. 3863. A bill to amend part A of title IV of the Social Security 
Act to require a State to promote economic and financial education 
under the Temporary Assistance for Needy Families (TANF) Program and to 
allow economic and financial education to count as work activity under 
that program; to the Committee on Finance.
  Mr. AKAKA. Mr. President, today, I am introducing the TANF Economic 
and Financial Education Promotion Act of 2006, with my colleagues 
Senators Lautenberg, Stabenow, and Obama. I appreciate the work of our 
former colleague, Senator Corzine, for initiating this important 
financial and economic literacy bill, of which I had been an original 
cosponsor. This bill is a product of revisions suggested by the

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Jump$tart Coalition for Personal Financial Literacy and the American 
Savings and Education Council, as well as consultation with other 
community groups such as the National Association of Securities Dealers 
and National Council on Economic Education.
  As noted in the bill's findings, high levels of personal debt and 
bankruptcy filings combined with a negative personal savings rate in 
2005 have put more and more individuals on the edge of financial 
insolvency. Individuals who are already living with less-than-ideal 
financial circumstances--such as most Temporary Assistance for Needy 
Families, TANF, recipients and others who are not financially self-
sufficient and live outside the financial mainstream--apply to 
predatory lenders for short-term loans with comparatively high interest 
rates or fees, or are able to save little or nothing for emergencies or 
future events. A lack of basic consumer finance education, including 
lack of familiarity with how a checking or savings account works, has 
been cited as a major reason millions of Americans do not set up 
mainstream accounts and, thus, put themselves into greater financial 
peril.
  Economic and financial education can help individuals and families 
meet short-term obligations and maximize their well-being in the long-
term, particularly in populations traditionally underserved by 
mainstream financial systems. Such education can provide access to the 
tools needed to create household budgets, initiate savings plans, and 
build assets, as well as keep vulnerable individuals from unknowingly 
entering or being forced into financially devastating credit 
arrangements. Core goals of economic and financial literacy activities 
complement TANF's aims to reduce welfare dependency, helping people 
achieve self-sufficiency.
  For families transitioning from welfare into work, challenges 
continue to abound, including obtaining child care and transportation. 
Another challenge that is often overlooked, however, is the difficulty 
of transitioning from a benefits- to a wage-based income. Financial and 
economic literacy programs that educate families through this 
transition about taxes and tax benefits that they may be eligible for, 
such as the Dependent Care Tax Credit and the Earned Income Tax Credit, 
can help to ensure that they have access to these important work 
benefits.
  The bill we are introducing today would tackle this problem for a 
targeted group of Americans by making economic and financial education 
an allowable use of federal TANF funds and a qualified work activity 
under the law. The bill would also require States, through 
collaborations with local banks, community-based organizations, 
business entities, and members of the Federal Financial Literacy and 
Education Commission, to promote financial education in their state 
TANF plans. States must ensure that such activities are accessible to 
the target population by way of appropriately-geared curriculum, 
provide relevant and practical information to participants, include a 
direct delivery component, and, to the extent practicable, work with an 
asset building program conducted in that state. This bill aims to make 
a big difference for one of our country's most vulnerable populations 
and provide them access to tools that can allow them to stand on their 
own feet, for themselves and their families.
  I thank my cosponsors for joining me in introducing this bill, and I 
urge other colleagues to support this meaningful legislation. I ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3863

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``TANF Economic and Financial 
     Education Promotion Act of 2006''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Most recipients of assistance under the Temporary 
     Assistance for Needy Families (TANF) Program established 
     under part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) and individuals moving toward self-
     sufficiency operate outside the financial mainstream, paying 
     high costs to handle their finances and saving little for 
     emergencies or the future.
       (2) Personal debt levels and bankruptcy filing rates are 
     high and savings rates are at their lowest levels in 70 
     years. In 2005, the savings rate was negative. The inability 
     of many households to budget, save, and invest prevents them 
     from laying the foundation for a secure financial future.
       (3) Financial planning can help families meet near-term 
     obligations and maximize their longer-term well being, 
     especially valuable for populations that have traditionally 
     been underserved by our financial system.
       (4) Economic and financial education can give individuals 
     the necessary financial tools to create household budgets, 
     initiate savings plans, and acquire assets.
       (5) Economic and financial education can prevent vulnerable 
     customers from becoming entangled in financially devastating 
     credit arrangements.
       (6) Economic and financial education that addresses abusive 
     lending practices targeted at specific neighborhoods or 
     vulnerable segments of the population can prevent 
     unaffordable payments, equity stripping, and foreclosure.
       (7) Economic and financial education speaks to the broader 
     purpose of the TANF Program to equip individuals with the 
     tools to succeed and support themselves and their families in 
     self-sufficiency.
       (b) Purposes.--The purposes of this Act are the following:
       (1) To promote economic and financial literacy among 
     individuals receiving assistance under Temporary Assistance 
     for Needy Families programs funded under part A of title IV 
     of the Social Security Act (42 U.S.C. 601 et seq.) by 
     permitting States to include economic and financial literacy 
     education that is provided directly to individuals as a work 
     activity under such programs.
       (2) To provide individuals receiving assistance under 
     Temporary Assistance for Needy Families programs funded under 
     part A of title IV of the Social Security Act (42 U.S.C. 601 
     et seq.) with the skills and knowledge needed to effectively 
     address personal financial matters and to make financial 
     choices that will lead such individuals toward becoming 
     financially self-sufficient.

     SEC. 3. REQUIREMENT TO PROMOTE ECONOMIC AND FINANCIAL 
                   EDUCATION UNDER TANF.

       (a) State Plan Requirement.--Section 402(a)(1)(A) of the 
     Social Security Act (42 U.S.C. 602(a)(1)(A)) is amended by 
     adding at the end the following new clause:
       ``(vii) Establish goals and take action to promote economic 
     and financial education in accordance with a program 
     established under section 404(l) among parents and caretakers 
     receiving assistance under the program through collaboration 
     with community-based organizations, financial institutions, 
     business entities, the Financial Literacy and Education 
     Commission established under section 513 of the Fair and 
     Accurate Credit Transactions Act of 2003 (20 U.S.C. 9702) and 
     departments and agencies that are members of such Commission, 
     including the Department of Agriculture, the Securities and 
     Exchange Commission, and the Board of Governors of the 
     Federal Reserve System.''.
       (b) Program Requirements.--Section 404 of the Social 
     Security Act (42 U.S.C. 604) is amended by adding at the end 
     the following new subsection:
       ``(l) Economic and Financial Education.--
       ``(1) In general.--Subject to the succeeding paragraphs of 
     this subsection, a State to which a grant is made under 
     section 403--
       ``(A) shall use the grant or State funds that are qualified 
     State expenditures (as defined in section 409(a)(7)(B)(i)) to 
     establish a program to provide economic and financial 
     education directly for parents and caretakers receiving 
     assistance under the State program funded under this part; 
     and
       ``(B) may count a parent's or caretaker's hours of 
     participation in such program as being engaged in work for 
     purposes of determining monthly participation rates under 
     section 407(b)(1)(B)(i).
       ``(2) Requirements.--A State shall ensure that the economic 
     and financial literacy activities conducted under the program 
     established under this subsection--
       ``(A) are accessible to the target population through 
     curriculum geared to the general literacy level of the 
     participants;
       ``(B) provide relevant and practical information to 
     participants;
       ``(C) include a direct delivery component; and
       ``(D) to the extent practicable, are conducted in 
     conjunction with an asset building program conducted in the 
     State.
       ``(3) Collaboration with nongovernmental or nonprofit 
     organizations encouraged.--In carrying out economic and 
     financial education activities under a program established 
     under this subsection, a State is encouraged to collaborate 
     with nongovernmental or nonprofit organizations with a proven 
     record of educating the public, especially at-risk 
     populations, regarding economic and financial literacy.
       ``(4) Evaluation.--A State shall conduct an evaluation of 
     the economic and financial literacy program established under 
     this subsection not less than once every 3 years for the 
     purpose of--
       ``(A) monitoring the number of parents and caretakers 
     served under the program;
       ``(B) improving program administration;
       ``(C) facilitating replication and expansion of best 
     practices;

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       ``(D) assessing behavioral changes of participants; and
       ``(E) assessing asset accumulation of participants.
       ``(5) Definition of economic and financial education.--In 
     this subsection, the term `economic and financial education' 
     means education that--
       ``(A) promotes an understanding of consumer, economic, and 
     personal finance concepts, including basic economic concepts 
     such as supply and demand and opportunity cost, as well as 
     basic financial literacy concepts such as budgeting and money 
     management, saving, retirement planning, maintaining good 
     credit, and the avoidance of predatory lending and financial 
     abuse schemes; and
       ``(B) is based on recognized standards for economic and 
     financial education.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph(2), the 
     amendments made by this section take effect on October 1, 
     2006.
       (2) Exception.--In the case of a State plan under part A of 
     title IV of the Social Security Act which the Secretary of 
     Health and Human Services determines requires State 
     legislation in order for the plan to meet the additional 
     requirements imposed by the amendments made by this Act, the 
     effective date of the amendments imposing the additional 
     requirements shall be 3 months after the first day of the 
     first calendar quarter beginning after the close of the first 
     regular session of the State legislature that begins after 
     the date of enactment of this Act. For purposes of the 
     preceding sentence, in the case of a State that has a 2-year 
     legislative session, each year of the session shall be 
     considered to be a separate regular session of the State 
     legislature.
                                 ______