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Asset-Building @ It’s MOMENT: Federal Policy jim Casey Youth Conference

Asset-Building @ It’s MOMENT: Federal Policy jim Casey Youth Conference. Carol Wayman, CFED.

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Asset-Building @ It’s MOMENT: Federal Policy jim Casey Youth Conference

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  1. Asset-Building @ It’s MOMENT:Federal Policyjim Casey Youth Conference Carol Wayman, CFED

  2. “We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest.” -- President Barack Obama, April 2009

  3. Assets Across America: Scorecard Data

  4. Policy Window - Open

  5. Take Action! Any tax bill should include asset-building opportunities for low- income families.

  6. Asset-building opportunities for 50 million people Matched Savings Expansion • Foster Youth Financial Security Act (HR 6193) • ASPIRE: S. 3577, H.R. 4682 • IDA Protection Act: H.R. 6067 • Stephanie Tubbs Jones Assets for Independence Reauthorization Act of 2010 (H.R. 6354). • Savings for Working Families Act: S. 985, H.R. 2277 • Savings Enhancement for College Education: H.R. 1351 • Expanding the Saver’s Credit: S. 3090, H.R. 1961 • Infrastructure Improvements • SSI Savers Act: H.R. 4937 • Automatic IRA Act: S. 3760, H.R. 6099 = bipartisan support italics = House bill only

  7. Foster Youth Financial Security Act (H.R. 6193) • Lead sponsor: Congressman Jim Langevin (RI-D) • As of 11/10/2010 bill has • 4 additional cosponsors: • Fortney Pete Stark (CA-D) • John Conyers (MI-D) • Rosa DeLauro (CT-D) • John Lewis (GA-D)

  8. Foster Youth Financial Security Act (H.R. 6193) • $45 million annual appropriation to implement act • No specific requirements of how much must be spent on the IDAs • State Agencies manage the IDAs • Savings match not specified in legislation, likely to conform to other HHS programs (ie: variable) • Broad eligible uses

  9. Children’s Accounts • Savings Enhancement for Education in College Act (HR 1351) • Saver’s Credit for 529 College Savings Account contributions and computers are eligible • ASPIRE (HR 4682 & S 3577) • one‐time, $500 government contribution at birth • supplemental contribution as much as $500

  10. Assets for Independence Program Facts • AFI provides the majority of federal funding for IDA matched savings programs across the country. • Many AFI projects offer services targeted to specific groups, including refugees/immigrants, victims of domestic violence, the homeless, and individuals with disabilities. • Tens of thousands of AFI savers have gone on to buy a home, attend college, or start a business. • IDA savers keep their homes and businesses and complete their college education

  11. IDA Protection Act, HR 6067 • Adds $50 million for AFI IDAs • No match required • Paid for by eliminating a coal tax • Introduced by Congresswoman Linda Sánchez (CA-D)

  12. AFI Reauthorization • Stephanie Tubbs Jones Assets for Independence Reauthorization Act of 2010 (H.R. 6354) • Waivers included • Ways and Means Committee in House • Health, Labor, Education and Pensions in the Senate

  13. IDA Tax Credit (H.R. 2277/S. 985 - Lincoln) • Adds at least 2.7 million IDAs through a federal tax credit to financial institutions that match the savings of adults (ages 18-60) • Financial institutions would be reimbursed for matching funds ($2,000 over 4 years), plus a limited amount for administrative costs incurred ($50 per year per account) • $120 million for financial education • Accounts restricted (1) buying a first home; (2) receiving post-secondary education; or (3) starting or expanding a small business

  14. The Saver’s Credit - current • The Saver's Credit is a non-refundable tax credit available to eligible taxpayers who make salary-deferral contributions to their employer sponsored retirement plans(401(k), 403(b), SIMPLE, SEP or governmental 457 plan), and/or make contributions to their Traditional/Roth IRAs • The current credit is between 10-50% ofthe individual's eligible contribution of up to $2,000, which means it cannot be more than $1,000

  15. The Saver’s Credit - current • Adjusted gross income must not exceed the following limits: • Lower the individual's AGI, the higher the saver's credit eligibility • Vastly underutilized – 50 million individuals eligible, <6 m claim

  16. The Saver’s Credit – Proposed: HR 1961/S. 3090 • Expands the credit to additional middle‐income working families by raising the income eligibility for families from $55,500 in FY09 to $65,000; • Matches 50% of the first $1,000 of savings for families ($500 for individuals) earning <$65,000; • Automatically deposits matching funds into designated personal retirement accounts by using account information listed on IRS tax filings through IRS Form 8888 (HR 1961 only); • Indexes contribution limits for inflation

  17. Infrastructure Improvements • SSI Saver’s Act (HR 4937) • Raising the asset limit to $5,000 for a single and $7,500 for joint filers and index these limits for inflation • Excluding retirement savings from inclusion in the asset test (<65 age) • Excluding savings in qualified retirement accounts below a specified ceiling of (indexed for inflation) $10,000 for an individual and $15,000 for a couple or household (indexed for inflation) (>65 age) • Exclude IDAs and Education Savings Accounts as well

  18. Automatic IRA, (S. 3760/HR 6099) • Automatic IRA Act of 2010 (S. 3760/HR 6099) • Success of automatic enrollment in private sector • > half U.S. workforce (78 million) do not have access to employer‐sponsored retirement plan • Obama FY 2011 budget request included requirement: employers w/o retirement plans must offer auto payroll deductions into IRAs

  19. www.cfed.org www.cfed.org/go/advocacy http://cfed.org/policy/ http:///saverscreditalliance.cfed.org http://www.childsavingscoalition.org/

  20. www.cfed.org www.cfed.org/go/advocacy Latest on legislation, track bills, send messages • Michelle Levy-Benítez, consultant, mbenitez@cfed.org • Inemesit Imoh, Policy Associate, 202.207.0135, iimoh@cfed.org • Katherine Lucas, Policy Analyst, 202.408.9788, klucas-smith@cfed.org • Jessica Morales, Administrative Assistant, 202.207.0159, jmorales@cfed.org • Carol Wayman, Federal Policy Director, 202.207.0125, cwayman@cfed.org

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