$500 just for being born
The idea of giving a savings account to every newborn is making the rounds in Congress and has high-profile support. The goal is to give kids a head start on assets. Sarah Gardner reports.
A nest egg with $100 bills (istockphoto.com)
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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.
