|
WASHINGTON - Senator Joe Lieberman (ID-CT) today joined colleague Jim Bunning (R-KY) in introducing the Savings for Working Families Act of 2007, which would expand Individual Development Accounts (IDAs), an innovative and successful approach to combating poverty and raising the savings rate. IDAs provide low-income, working Americans the opportunity to build assets through matched savings accounts. Savings can then be used for the purchase of a home, to develop small businesses, or to pursue a post-secondary education.
"A home for your family, a business to call your own, and an education that will lead to a fulfilling career -- we call these things 'The American Dream' and its power runs deep in our national psyche," Lieberman said. "However, for millions of working Americans it is nearly impossible to build up the financial assets they need to pursue these dreams. The Individual Development Account concept is a progressive idea that gives those with few financial resources a chance to build a nest egg and turn that dream into a reality."
IDA programs are implemented by community-based organizations in partnership with a financial institution that holds the deposits. Currently, over 50,000 such accounts have been established nationwide, including nearly 500 in Connecticut. The match incentive - similar to an employer match for 401(k) contributions - is provided through a variety of governmental and private sector sources. By providing federal funding to create 900,000 additional accounts, the Lieberman-Bunning bill would increase the program eighteen-fold.
The fundamental element to the success of IDAs is financial literacy for the participants in the program. Information about repairing credit, reducing expenditures, avoiding predatory lenders, and accessing financial services helps IDA participants to reach savings goals and to integrate themselves into the mainstream economic system.
Senator Lieberman has championed this unique asset-building concept having introduced IDA expansion during the 108th and 109th Congress, as well. Supporters include the American Bankers Association, Credit Union National Association, National Black Chamber of Commerce, National Council of La Raza and the United Way of America.
Senators Olympia Snowe (R-ME), Blanche Lincoln (D-AR), Susan Collins (R-ME), and John Kerry (D-MA) are also co-sponsoring this legislation in the Senate, while Rep. Phil English (R-PA) and Rep. Stephanie Tubbs Jones (D-OH) have introduced similar legislation in the House.
-30-
|
