WASHINGTON (NEWS10) – The American Opportunity Accounts Act, commonly known as “Baby Bonds,” was reintroduced to Congress. The program will create a federally-funded savings account for every American child at birth.
The funds will sit in an account, with interest, and can be accessed once the account holder turns 18. These accounts are meant to be used for things like buying a home, paying for educational expenses or starting a business.
“In order to rebuild our economy equitably and address systemic racism, we must enact a bold agenda that will provide tools and resources to communities who were already hurting before the pandemic,” said Senator Gillibrand. “Not only will Baby Bonds legislation help families build intergenerational wealth, regardless of where they are from or what they look like, but it enables investment in our communities from the moment our children are born. I look forward to working with my colleagues in the Senate and in the House to get this legislation passed.”
The American Opportunity Accounts Act will create a “new American birthright” by giving children a “fair chance” at economic opportunity and mobility. The legislation will create a savings account of $1,000 at birth, with additional deposits of up to $2,000 each year, depending on household income.
Over the last few years, momentum for Baby Bonds has grown in Congress and in state legislatures across the country. In the last year, the legislation has gone from 1 to 15 Senate cosponsors, covering the Democratic caucus. Recent studies by Columbia University and Morningstar have found that a program like Baby Bonds would substantially close the racial wealth gap in America.