Rep. Joe Crowley, D-NY, vice chair of the Democratic Caucus unveiled a plan this week that would address the savings and retirement security crisis in America by giving families better ways to save for the future and retire with dignity.
Crowley’s “Building Better Savings, Building Brighter Futures” plan would create new financial options that encourage Americans to save, participate in workplace retirement plans and bolster Social Security.
With nearly half of U.S. households having insufficient savings for an emergency, and one-third of workers saying they are not saving for retirement at all, the savings and retirement security crisis in the U.S. threatens the financial well-being of the middle class and those working to join the middle class, he said.
“We know that savings are the path for middle class families to achieve the American Dream, yet that dream is increasingly being put at risk. Too many Americans say that they want to save for the future, and they know they should be saving for the future – but it’s easier said than actually done,” said Rep. Crowley. “My Building Better Savings, Building Brighter Futures plan makes saving not just a priority, but a possibility for every American. The time to act is now.”
His plan would create long-term savings accounts called USAccounts that would help children begin saving at an early age. When a child is born, a USAccount would be established in the child’s name and the government would contribute $500 to it the first year. As families contribute to the child’s account, the government would match a portion of future yearly contributions, based on family income.
The proposal also would increase the Child Tax Credit for those who save through their child’s account, giving low-income families the opportunity to contribute to the savings account.
Crowley’s proposal also would make President Barack Obama’s myRA proposal permanent. The myRA gives American workers a safe, stable and portable savings option that allows them to contribute as little as they want at a time and eliminates barriers such as early withdrawal penalties.
His plan also would establish universal pension accounts called “Secure, Accessible, Valuable, Efficient Universal Pension accounts or SAVE Ups so every American has access to a guaranteed form of retirement income. SAVE UP accounts would be funded by employers and employees.
Crowley wants to shore up Social Security so it continues to serve millions of Americans moving through the 21st Century. His plan would shore up funding, stand firm against changes to the cost of living allowance and fight efforts to cut Social Security disability payments to 11 million Americans.
“For the past century, Democrats have been at the forefront of putting forward big, bold ideas to bring security and peace of mind to working families. And so it will be the Democratic Party that again leads the charge to address the looming savings and retirement crisis,” he said.
He added, “Too many Americans say they want to save, know they should save, but it not that simple. Let’s make it easy. Let’s make it habitual and second nature to begin saving.”