FROM THE OFFICE OF PUBLIC AFFAIRS

Thank you for inviting me to speak to the Jumpstart Coalition dinner tonight. Your group has done a lot of good work setting standards for financial education and making things happen. Your mission to educate young Americans is my mission, Treasury's mission, and President Bush's mission.

In America today we have unprecedented freedom, and unprecedented opportunity. Nearly everyone -- everyone who has their health -- has the capacity to achieve what they want in life, including financial independence. Every person you know -- from whatever financial background -- wants to be able to afford a comfortable retirement, a nice home, and college education for their children and grandchildren..

Financial independence is a goal all Americans share. Yet many Americans don't know how to become wealth-accumulators. They never learn the basics of personal finance -- the tools necessary to build financial independence for themselves and their families, one dollar at a time. They never learn the value of saving and investing, or about the magic of compound interest, and how a little planning early in life can make a huge difference in later years.

We must work to ensure that all Americans have the knowledge and the tools to build their own financial security. Ownership, independence, and access to wealth should not be the privilege of a few. They should be the hope of every American. Financial literacy is an essential tool to make that hope a reality.

I'll tell you how I got my first lesson. When I was a boy in Missouri, in my grade school we could buy 10-cent savings stamps, and when we accumulated $18 or $19 worth, we could trade them in for a $25 bond. We collected the stamps in a little booklet. I'd earn a dime carrying someone's groceries, take the dime to school, buy a stamp and glue it into the booklet. I learned about saving and I learned about interest. A $25 bond may not sound like much today, but in Missouri back then you could do a lot with $25, believe me.

We need those lessons in our schools still, if we are to empower a nation of wealth accumulators. In a truly great nation, our schools will teach our children so that every 10-year-old can read and write, and knows enough to be a life-long self-learner even if she never sees the inside of another classroom. As part of that, our schools also need to teach the basic rules of personal finance -- so that life-long learners will also be life-long earners. That is our obligation to our children, so they can prosper in the global economy.

Financial education and financial responsibility must be woven into what we teach our children from the time they are very small. Personal finance needs to be woven into the core curriculum, inextricable, just as responsibility for personal finance is an inextricable part of American life. Teaching children how to balance a checkbook should be part of teaching them how to add and subtract. Teaching children about interest is an easy step from teaching the multiplication tables. And reading lessons can easily incorporate financial education. The possibilities are endless.

You are all well aware of our real-world needs for financial education: Four out of ten Americans say they are living beyond their means. Personal bankruptcies rose 69% in the 1990s. A large number of Americans are not saving enough for retirement, or have not even considered how much they need to save for it. Six in ten Americans have to hire someone else to do their taxes -- well, that's a slightly different problem. No one understands the tax code.

Yet I saw that in Jumpstart's recent personal financial survey, more than half of high school seniors failed in basic financial literacy.

Don't get me wrong. Confusion can be understandable with all the options today. It wasn't long ago that if you wanted to buy something you had two choices: cash or take a hike. Now we've got personal checks, credit and debit cards, and an ATM on every corner. There are dozens of types of mortgages for prospective homebuyers, and some don't even require money down. Cars can be 100% financed, bought or leased. Families can pay for college tuition or retirement with investment returns from stocks, bonds, mutual funds, money markets, CDs, REITS, annuities, and who knows what else.

These choices are good. Most of them represent real value for consumers. Our financial system is the envy of the world. But these choices may be meaningless or worse, dangerous, to the uneducated.

And even as the fruits of financial freedom hang so low on the tree today, some of the fruit is rotten. Some purported investments are frauds. Some alleged tax breaks are scams. Some credit cards and mortgages have usurious rates and hidden fees. The careless and the uninformed can get mired in debt. Education is our best defense against the unscrupulous and the criminal, who would foist their schemes on our citizens.

And education has to start early to be most effective. Financial education needs to be in the primary school and high school curriculum.

I take this subject very seriously, out of my personal interest in education and also because the Treasury has a general responsibility for the health of the American economy, and the economic health of the American people. Our economy is founded on the notion of personal responsibility and personal achievement. If we want people to build the American dream for themselves, we need to give them the tools. Our goal in government is to ensure that every human being has the opportunity to reach his or her full potential.

Knowing how to balance a checkbook and manage a credit card are skills that contribute to financial stability throughout a lifetime. Whether it's saving to buy a bike when you're a child, saving for a first home when you've just started working, or saving for retirement throughout your working days, at every age, saving now means more comfort -- and more freedom -- later.

I'm especially concerned about financial independence for Americans as they reach retirement age. Our Social Security system is only one part of retirement security. Individual savings -- through 401(k)s, pensions, IRAs, and other tools -- is crucial to the peace of mind that every American wants in retirement. It's far easier to save for a comfortable, dignified old age if you start early. Young people today need to understand how to start saving early for their own retirement, how to take advantage of tax-exempt retirement savings programs, and how to use financial instruments for investment. Congress has created a number of programs to encourage saving for retirement -- but these are meaningless if people don't know about them, and how to use them.

NEW INITIATIVES

As part of our long-term commitment to improve financial education for all Americans, we are establishing a new office at Treasury. The Office of Financial Education will be under the leadership of our Assistant Secretary for Financial Markets, Sheila Bair --whose knowledge and enthusiasm you all know well -- and a new Deputy Assistant Secretary. The Office of Financial Education will develop and implement financial education policy initiatives, and will oversee and coordinate our outreach efforts.

Our Treasurer, Rosario Marin, has also been active in this effort, and has promoted financial literacy since the day she joined us. She has addressed the Treasurers of all 50 states, to engage them in this effort as well. She has devoted her time to reaching out to local officials and community leaders in every corner of the nation, to spread the word that financial education must be a priority for all who hope to prepare our children for economic success.

In the spirit of President Bush's education bill, the "No Child Left Behind Act," the United States Treasury is working with the Department of Education to expand financial education. We will collaborate with the Department of Education to encourage all schools to integrate financial education into their curricula. Not as a separate discipline, but by exposing students to basic financial and economic principles as they acquire their core reading and math skills.

Treasury and Education will jointly host a series of roundtables with groups representing youth education. The roundtables will include these groups in a frank discussion about the challenges and opportunities for our Departments as we promote in-school financial education.

"Bank on Your Schools," a partnership between schools and financial institutions, will promote financial education in low and moderate income areas. This initiative will encourage financial institutions to open student-run branches in high schools, or give students a chance to work in the institutions themselves. Students will get hands-on experience with what it's like to run a bank or credit union office, and they'll learn about financial issues -- especially the importance of saving and managing your money to earn a return on it.

The lesson is the same now as it was when I was a boy growing up in Missouri. Kids need to know that if they put their money in the bank, it's going to be safe, and it's going to be worth even more in the future.

There is no doubt that the way to make this happen is through establishing partnerships -- with groups like Jumpstart, with schools, with communities, and with the financial industry. We need to muster all of our resources to teach our children about personal finance. Within the federal government, we are planning an interagency working group to coordinate the financial education programs of other government agencies, and to avoid duplicating our efforts.

The initiatives that I have outlined are just the beginning for our new Financial Education office. Improving financial education will require a long-term, multi-faceted effort on our part. We are going to set our goals high, and we are going to measure the results. And I can tell you, we are not going to settle for a passing grade on this assignment -- we want an "A." Every American child should grow up with the tools to be financially independent.

Thank you.