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$500 just for being born

Sarah Gardner Oct 3, 2007
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$500 just for being born

Sarah Gardner Oct 3, 2007
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TEXT OF STORY

Scott Jagow: A bill being introduced in Congress this morning might breathe new life into an old idea: Savings accounts for children. Sarah Gardener has more.


Sarah Gardner: The idea is simple: give every American newborn $500 in a tax-free savings account. At age 18, kids can use it for college — or they can sock it away until later for a first home or retirement.

Supporter Ray Boshara at the New America Foundation says more than a third of children grow up in households without investments.

Ray Boshara: If we don’t endow these kids with assets at birth, I think their opportunities for a better life are diminished.

So-called “baby bonds” have high-profile support. Hillary Clinton recently proposed giving everyone $5,000 at birth.

But political scientist Larry Sabato doesn’t think the idea will fly, at 5,000 or 500:

Larry Sabato: There’s just no justification really for giving this money to upper middle-class and the wealthy. It just looks like a way to buy votes, frankly.

Under the latest bill, poor children would get a $1,000 nest egg.

I’m Sarah Gardner for Marketplace.

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