U.S. Sen. Cory Booker introduced legislation on Thursday that would create a federally-funded savings account for every newborn in the United States, an idea he first proposed several years ago and promoted during his unsuccessful run for president in 2020.
What the bill does: Under the so-called baby bonds program, the federal government would open a $1,000 savings account for every American child at birth, with additional deposits of up to $2,000 a year based on household income. Recipients could begin making withdrawals when they turn 18.
The program is designed to narrow the racial wealth gap, Booker (D-N.J.) said.
Booker, who introduced the legislation along with Rep. Ayanna Pressley (D-Mass.) said that because the “opportunity accounts“ would be interest bearing — paying around 3 percent annually — a child could have up to $50,000 by the time they turn 18.
"The money can be used for wealth building things going to college, starting a business, buying a home,” Booker said during an Instagram Live event with Pressley. “It is an effort to create generations of wealth and the powerful thing about this is that [it] would have an incredible effect to leveling the economic playing field."
Gaining momentum: Booker’s original proposal failed to gain much support in Congress, but he continued to promote it during his unsuccessful presidential run last year. Booker said Thursday there’s been growing momentum for the proposal, as more more senators — albeit all Democrats — have signed on as co-sponsors. He said he’s hopeful the measure can be passed by a Democrat-controlled Congress and signed by President Joe Biden.
“It was lonely when we introduced it the first time. Now, we have 15 senators, including Majority Leader Chuck Schumer,” Booker said Thursday. “So we’re gaining traction and momentum.”
Co-sponsors include Sens. Kirsten Gillibrand (D-N.Y.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Amy Klobuchar (D-Minn.), all of whom ran for the Democratic presidential nomination in 2020.
Other efforts: New Jersey Gov. Phil Murphy proposed his own version of the baby bonds program in last year’s state budget. The idea was to give $1,000 to every child born in New Jersey whose families met a certain income threshold. The proposal failed to make it into the final budget.
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