Are Child Savings Accounts a Good Idea?
Here in California, Republican State Sen. Bob Dutton and Democrat Sen. Darrel Steinberg have been promoting a bill to give every child born in California, starting in 2008, a $500 savings account. This would have, of course, included the children of illegal immigrants.
The amount of controversy about this bill caused Dutton to cease supporting the bill. Much of the outcry had to do with the children of illegals getting money. To me, it makes sense to give the money to all citizens, regardless of the citizenship of the parents.
That said, I don’t think children of illegals should be citizens automatically. That may have once made sense, but these days it does not. And if you look at other countries, we are highly unusual in making birth in this country an easy way to become a citizen.
It should be remembered that so long as the children of illegals are not illegal themselves, we need to treat them as legal citizens. If the children of citizens get a benefit, so should these children.
The money in this account is held until the child is 18, so it is not something the parents can easily snatch.
Will this encourage illegals to come give birth in California? I suspect so.
I would also question how financially feasible this is for a state to do. Do we really have the funding for this? Would the money be better spent on our schools? Or on something to help our students succeed? A one-time $500 expenditure per child could be used in a huge variety of ways. It would just be a matter of figuring out the best way to do so.
The trouble is that while this would ensure that every child would have some money upon reaching age 18, it does nothing to push them to save or spend wisely on their own. If a child has not learned good money habits by 18, how fast do you think that money would be gone?
Technorati Tags: child savings accounts, california, Republican State Senator Bob Dutton, Democrat Senator Darrel Steinberg, illegal immigration, automatic citizenship, citizens
Filed under: Controversial, Politics
I am Sen. Dutton’s Communications Director. Last Friday he removed his support for the bill. Here is his response.
Senator Dutton Removes Name From SB 752
SACRAMENTO – Sen. Bob Dutton (R-Rancho Cucamonga) announced today that he is no longer co-authoring Senate Bill 752.
“I have decided to remove my support for Senate Bill 752. In light of the state’s deteriorating fiscal situation, I cannot support the bill as currently written.
“I will continue to work to assist California’s families by looking into tax breaks and other opportunities.
“Over the last 48 hours, thousands of Californians have asked me what I was thinking so I thought I would take this opportunity to share my thoughts.
“I looked at this from two angles; first, I have never seen a tax cut that I didn’t like and second, I always look for ways to create opportunity. Republicans in the legislature should be thinking creatively about how to return more tax money to hard working Californians.
“The idea of a KIDS Account is not a new one and has conservative roots. Republican U.S. Sen. Rick Santorum of Pennsylvania introduced an identical idea in the Senate in 2005. He said, “America must become an ownership society where individuals in all economic stations have the opportunity to obtain assets, whether that be a home, savings account or investment portfolio.” Just yesterday, Federal Reserve Chairman Ben S. Bernanke voiced his support for similar accounts by saying “To the extent that we can help people learn about how to save, how to budget, we are doing a great service.”
“The national savings rate is at its lowest point since the Great Depression. Americans are carrying record levels of debt. According to a survey by the Coalition for Financial Security, less than a third of people under 40 own investment products. The State must not legislate investment behavior. What we can do is create opportunities for people to learn financial skills. As individuals increase their financial literacy, the cause of liberty is advanced.
“So many government social programs guarantee dependence on government for years and generations to come. Individuals choosing to spend their savings on higher education, buying a house or rolling it over to a retirement account will become less dependent on state government. Republicans understand that as self-sufficiency increases the power of the state decreases.
“I came to Sacramento with an agenda to create opportunity and self-sufficiency. Legislative Republicans have to be creative in order to advance our agenda. Legislative Republicans should help create generations of adults who will depend less on government. Financial literacy advances freedom. Freedom advances a Republican agenda and more importantly advances the cause of liberty.”
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