March 8, 2023
Pressley, Booker Urge Treasury Department Advisory Committee on Racial Equity to Support Baby Bonds
Baby Bonds Would Help Close Racial Wealth Gap, Gaining Traction in Cities and States Nationwide
WASHINGTON – Today, Congresswoman Ayanna Pressley (MA-07) and Senator Cory Booker (D-NJ) urged the Treasury Advisory Committee on Racial Equity (TACRE) to study the merits of the American Opportunity Accounts Act and consider including its findings in its upcoming reports to the Treasury Department about ideas that could advance greater equity in the economy. The lawmakers’ letter follows their reintroduction of the bill last month and comes ahead of TACRE’s next meeting on March 9.
Pressley and Booker’s legislation, also known as ‘Baby Bonds,’ would give every child in America a fairer chance at economic mobility by creating a seed savings account of $1,000 at birth. The funds would sit in an interest-bearing account that would receive additional deposits each year depending on family income. At age 18, account holders would access the funds in the account for uses like buying a home or paying for educational expenses.
While the baby bonds proposal would benefit every child born in America, studies by Columbia University and Morningstar have found that a program like Baby Bonds would substantially close the racial wealth gap in America. Baby bonds programs have also gained traction in cities and states nationwide.
TACRE is a newly created committee that will provide advice and recommendations to leadership across the U.S. Department of Treasury on efforts to advance racial equity in the economy and tackle economic disparities within communities of color.
“The impact [of baby bonds] would be transformative: at a cost of approximately $60 billion annually, less than 10 percent of what we currently spend to subsidize wealth-building through the tax code, we can give every American a stake in our economy and agency over their future,” wrote Senator Booker and Representative Pressley in a letter to TACRE Chair Michael Nutter and Vice-Chair Felicia Wong.
“As TACRE begins its tenure, we urge you to study the merits of this legislative proposal and consider including it in your reports to the Department of Treasury. When it comes to racial justice, we cannot afford to wait. Baby Bonds is exactly the type of bold, comprehensive program necessary to advance racial equity in the economy and address acute disparities for communities of color,” concluded Senator Booker and Representative Pressley.
The full text of the letter can be found here.
The American Opportunity Accounts Act can be found here.
Rep. Pressley has consistently advocated for race-conscious policies to help close the racial wealth gap in America, including Baby Bonds. Last month, she and Sen. Booker reintroduced the American Opportunity Accounts Act, legislation that would create a federally-funded savings account for every American child in order to make economic opportunity a birthright for every child and help close the racial wealth gap.
Rep. Pressley has also been a leading voice in Congress urging President Biden to cancel student debt. Following years of advocacy by Rep. Pressley—in partnership with colleagues, borrowers, and advocates like the NAACP—the Biden-Harris Administration announced a historic plan to cancel student debt that stands to benefit over 40 million people.
In June 2021, Rep. Pressley and then-House Financial Services Committee Chairwoman Maxine Waters (D-CA) introduced the Downpayment Toward Equity Act of 2021, bold legislation to help address the U.S. racial wealth and homeownership gaps by providing $100 billion toward downpayment and other financial assistance for first-generation homebuyers to purchase their first home.
In May 2020, she introduced the Saving Our Street Act with then-Senator Kamala Harris (D-CA) to provide economic relief to small businesses with less than 10 employees, with a specific focus on Black and brown-owned businesses.