U.S. Rep. Ayanna Pressley (D-MA) and Senator Cory Booker (D-N.J.) are reintroducing legislation that would establish a federal baby bond in an effort to close the racial wealth gap, theGrio exclusively reports.
Pressley and Booker on Wednesday will introduce the American Opportunity Accounts Act, which would create a federally-funded savings account for every American child. The two Democrats say they hope the bill will make “economic opportunity a birthright.”
“The racial wealth gap in America is the result of generations of precise and intentional policy violence, so we must be as intentional and as precise about advancing policies that address it head-on,” Pressley said in a statement.
“Baby Bonds are one of the most effective tools we have for closing the racial wealth gap and breaking the cycles of poverty and trauma that have prevented Black and brown folks from thriving in this country,” her statement continued.
Booker first introduced the American Opportunity Accounts Act in 2019 during the 116th Congress. He reintroduced it with Pressley in 2021 in the 117th Congress. In both sessions, legislators never voted on the bill and only referred it to House committees.
If congressional leaders pass the bill this time and President Joe Biden signs it into law, the federal legislation would authorize the secretary of the Department of Treasury to transfer $1,000 into an account for every individual born after Dec. 31, 2023.
Depending on a family’s income, the American Opportunity accounts would receive up to an additional $2,000 a year and accrue interest until the individual is 18 years old. Accounts for minors in a family of four that earns less than $25,000 a year could accrue as much as $46,215, according to the congressional offices.
At age 18, account holders can use the funds for eligible “wealth-building activities.” A “qualified expense” includes…
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