As families across the Nation grapple with high costs, the 401Kids Savings Act would create children’s savings accounts for every American child
Casey introduced bill in January alongside report detailing how 401Kids works and why we need it
Outside analysis says 401Kids delivers $2.61 in benefits for every $1 invested, from increased income later in life, improved health, additional tax revenues, and lower crime
Senate hearing examined how the legislation would provide economic opportunity for every American family
Watch full recording of hearing here
Washington, D.C. - Today, U.S. Senator Bob Casey (D-PA)’s 401Kids Saving Act was highlighted at a Senate Finance Committee hearing. At the hearing, Casey touted how the bill would establish children’s savings accounts for every American child, creating economic opportunity for families across Pennsylvania and the Nation. Casey questioned experts on child savings account programs about the 5.8 million American kids, including 546,000 Pennsylvania kids, who have a children’s savings account in their name and the impact the accounts have had on their lives and their futures.
“Every child should have a place where their family, their community, and the government can invest in their future,” said Senator Casey (D-PA). “The 401 Kids Savings Act will enable children, when they reach adulthood, to have the money saved to pay for college, or to start a small business, to buy their first home, or to save for retirement.
Based on local models around the Nation, the 401Kids Savings Act would create children’s savings accounts that would be built on state 529 college savings platforms and managed by state Treasurers. Once the accounts are established for all newborns and kids under age 18, families, non-profits, employers, foundations, and others could contribute to a 401Kids Account which, starting at age 18, could be used for post-secondary education and training, a small business, a first home or retirement security. While all families could contribute up to $2,500 per year to the accounts, only lower- and moderate-incomes families would receive direct federal support. Casey introduced the bill in January alongside a report called “401Kids: Building Wealth for the Next Generation,” which delves into the proposal and examples of how CSAs are already working for kids in several states.
According to outside analysis by José Diaz, Chief Economist at the Constellation Fund, for every dollar invested in 401Kids, society would receive at least $2.61 in benefits associated with increased income, improved health, additional tax revenues, and savings to other government sectors.
Senator Casey has long led efforts in the Senate to uplift America’s children and ensure they have the resources and support they need to thrive. In 2021, he released his report, Five Freedoms for America’s Children, in which he outlined “five basic freedoms that our society must guarantee to our Nation’s children”—the freedom to learn, be healthy, well fed, safe from harm and—the subject of this bill—the freedom to be economically secure.
In addition to endorsing the permanent expansion of the Child Tax Credit—the temporary expansion of which, in 2021, led to a historic reduction in child poverty—the “freedom to be economically secure” called for the automation creation of CSAs for every child in America. The 401Kids Savings Act affirms Casey’s commitment to that call.
Watch the full hearing here.
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