[Congressional Record Volume 154, Number 85 (Thursday, May 22, 2008)]
[Senate]
[Pages S4796-S4797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH (for himself and Ms. Cantwell):
  S. 3053. A bill to amend title XI of the Social Security Act to 
provide grants for eligible entities to provide services to improve 
financial literacy among older individuals; to the Committee on 
Finance.
  Mr. SMITH. Mr. President, on behalf of Senator Cantwell, I introduce 
a bill to provide grants to Area Agencies on Aging to provide services 
to improve financial literacy among older individuals.
  A number of trends have occurred over the past few years that make 
financial literacy a critical element of retirement security. The 
personal savings rate in the United States has declined dramatically 
over the last two decades. According to the Commerce Department, the 
personal savings rate was 0.2 percent in March of this year. This means 
for every $1,000 of after-tax income, the average person saved only $2.
  In addition, the shift from defined benefit to defined contribution 
retirement plans has generally placed the burden on employees to 
effectively manage the investment of their pensions.
  However, many Americans, including older Americans, lack financial 
literacy skills. In the 2008 Retirement Confidence Survey by EBRI/
Matthew Greenwald & Associates, 40 percent of retirees surveyed 
reported that they are not knowledgeable about investments and 
investment strategies. In addition, a 2003 national survey by AARP of 
consumers aged 45 and older found that they often lacked knowledge of 
basic financial and investment terms. For example, only about half of 
respondents reported knowing that diversification of investments 
reduces risk.
  The Smith-Cantwell bill will improve older Americans' financial 
literacy and help them better prepare for and manage their assets in 
retirement. Under the bill, grants will be provided to Area Agencies on 
Aging to enable these organizations to provide services to improve 
financial literacy among older individuals, especially older women. 
These services include education, training and other assistance.
  This bipartisan financial literacy bill will help increase older 
Americans' financial literacy so they can make more informed and 
prudent investment and retirement planning decisions. And I am pleased 
that the Women's Institute for a Secure Retirement and the National 
Association of Area Agencies on Aging have both endorsed this bill.
  I look forward to working with my colleagues to enact this important 
bill. Mr. President, 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. 3053

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

     SECTION 1. FINANCIAL LITERACY SERVICES.

       Part A of title XI of the Social Security Act (42 U.S.C. 
     1301 et seq.) is amended by adding at the end the following 
     new section:


                     ``financial literacy services

       ``Sec. 1150A.  (a) Definitions.--In this section:
       ``(1) Area agency on aging.--The term `area agency on 
     aging' has the meaning given that term in section 102 of the 
     Older Americans Act of 1965 (42 U.S.C. 3002).
       ``(2) Financial literacy services.--The term `financial 
     literacy services' means the services described in subsection 
     (b)(1).
       ``(3) Older individual.--The term `older individual' has 
     the meaning given that term in such section 102.
       ``(b) Grants for Services.--
       ``(1) In general.--The Secretary shall make grants to 
     eligible entities and other entities determined appropriate 
     by the Secretary to enable the entities to provide services 
     to improve financial literacy among older individuals, 
     including older individuals who are women, and the family 
     members and legal representatives of such individuals. The 
     Secretary shall make the grants on a competitive basis, and 
     nationwide.
       ``(2) Eligible entities.--To be eligible to receive a grant 
     under this subsection, an entity shall be an area agency on 
     aging or another entity that meets such requirements as the 
     Secretary may specify.
       ``(3) Application.--To be eligible to receive a grant under 
     this subsection, an entity shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require. In the case of an 
     entity who intends to provide the financial literacy services 
     jointly with other services as described in paragraph (4)(C), 
     the application shall include information demonstrating that 
     the entity has the capacity to provide the services jointly.
       ``(4) Use of funds.--
       ``(A) In general.--An entity that receives a grant under 
     this subsection shall use the funds made available through 
     the grant to provide financial literacy services, such as 
     financial literacy education, training, and assistance.
       ``(B) Provision through contracts.--The entity may provide 
     the services directly or by entering into a contract with an 
     organization that provides counseling, advice, or 
     representation to older individuals and the family members 
     and legal representatives of such individuals in a community 
     served by the entity.
       ``(C) Provision with other services.--The entity may 
     provide the services alone or jointly with other services 
     provided by or funded by the eligible entity, such as--
       ``(i) services provided through State Health Insurance 
     Assistance Programs;
       ``(ii) services provided through a Long-Term Care Ombudsman 
     program under section 307(a)(9) or 712 of the Older Americans 
     Act of 1965 (42 U.S.C. 3027, 3058g);
       ``(iii) information and assistance services provided under 
     the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.);
       ``(iv) legal assistance services provided under the Older 
     Americans Act of 1965 (42 U.S.C. 3001 et seq.);
       ``(v) services provided through Senior Medicare Patrol 
     Projects conducted by the Administration on Aging;
       ``(vi) case management services; and
       ``(vii) services provided through Aging and Disability 
     Resource Centers.
       ``(5) Report.--The Secretary shall submit to Congress an 
     annual report on the activities carried out by entities under 
     a grant under this subsection.
       ``(c) National Support Center for Financial Literacy 
     Grant.--
       ``(1) In general.--The Secretary may make a grant to an 
     eligible center to coordinate the services provided through, 
     and support the grant recipients under, the grant program 
     carried out under subsection (b).
       ``(2) Eligible center.--To be eligible to receive a grant 
     under this subsection, a center shall--
       ``(A) be an entity that is housed within an organization 
     described in section 501(c) of the Internal Revenue Code of 
     1986 that is exempt from taxation under section 501(a) of 
     such Code;
       ``(B) have a minimum of 10 years experience operating a 
     national program and support center with a focus on financial 
     literacy; and
       ``(C) be primarily engaged in outreach and training 
     activities designed to provide financial education and 
     retirement planning for low- and moderate-income individuals, 
     particularly with respect to women; and
       ``(D) have a demonstrated record of collaboration with 
     organizations that focus on the needs of low- and moderate-
     income individuals and with national organizations serving 
     the elderly, including those working with area agencies on 
     aging and women, as well as organizations with expertise in 
     financial services and related fields.
       ``(3) Use of funds.--A center that receives a grant under 
     this subsection shall use the funds made available through 
     the grant to--
       ``(A) design and conduct training (which may include 
     providing training for trainers) related to financial 
     literacy services;
       ``(B) provide curricula for financial literacy services;
       ``(C) develop and disseminate relevant information about 
     financial literacy services;
       ``(D) conduct outreach to national, State, and community 
     organizations through a series of strategic partnerships in 
     order to improve financial literacy among older individuals 
     and the family members and legal representatives of such 
     individuals;
       ``(E) provide technical assistance to the grant recipients 
     under subsection (b) with respect to the program; and
       ``(F) collect data from such grant recipients about the 
     services provided under this section, and the impact of those 
     services.
       ``(4) Addressing challenges to women in securing adequate 
     retirement income.--In addition to the activities described 
     in paragraph (3), a center that receives a grant under this 
     subsection shall use the funds made available through the 
     grant to conduct activities that are focused on addressing 
     the challenges faced by older women, women of color, single 
     women, and women who are heads of households to securing an 
     adequate retirement income.
       ``(d) Coordination.--The Secretary shall ensure that the 
     activities carried out under the grant program under 
     subsection (b) and under a grant made under subsection (c) 
     are

[[Page S4797]]

     coordinated with the activities carried out by--
       ``(1) the Office of Financial Education of the Department 
     of the Treasury; and
       ``(2) the Financial Literacy and Education Commission 
     established under section 513 of the Financial Literacy and 
     Education Improvement Act (20 U.S.C. 9702).
       ``(e) Funding.--The Secretary of the Treasury shall 
     transfer to the Secretary of Health and Human Services from 
     the Federal Old-Age and Survivors Insurance Trust Fund and 
     Federal Disability Insurance Trust Fund established under 
     section 201 such funds as are necessary for making grants 
     under this section.''.
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