Democratic lawmakers in Washington are pushing for plan that would give every American child $1,000 at birth, followed by up to $2,000 per year until they reach the age of 18.
The American Opportunity Accounts Act was recently introduced by Sen. Cory Booker, D-NJ, and Rep. Ayana Pressley, D-Mass. The two recently urged Treasury Department officials to back the payments, dubbed “Baby Bonds.”
“The impact (of baby bonds) would be transformative: for about $60 billion per year, less than 10% of what we currently spend to subsidize wealth-building through the tax code, we can give every American a stake in our economy and agency over their future,” wrote Senator Booker and Representative Pressley in a letter to Treasury Department Advisory Committee on Racial Equity Chair Michael Nutter and Vice-Chair Felicia Wong.
Every American child would receive a $1,000 from the federal government.(Photo: UNICEF Nepal/2018)
The strategy would be as follows:
Every American child would be given a “American Opportunity Account” containing $1,000 in federal funds at birth. Every year, kids
Depending on their family income, they could receive an additional $2,000 deposited into their account.
The funds would be held in a federally insured account managed by the Treasury Department and would earn about 3% interest. The funds would become available at the age of 18 for allowable expenses such as home ownership or higher education.
The account’s value would vary depending on family income. A family of four with an income of less than $25,100 could grow the account to $46,215 per child; a family of four with an income of $125,751 could grow the account to $1,681, or the total growth of the initial $1,000 payments without the $2,000 yearly allotments.
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