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California Bill - To give Newborns $500 Savings Accounts

bczoom

Super Moderator
Staff member
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Link Here Copy below.

Text: (Bolding and underline is mine
SACRAMENTO — Every child born in California would get a $500 savings account to start building a nest egg for college or down payment for a home, under a bipartisan bill introduced Wednesday in the state Senate.

The proposal would cost taxpayers about $285 million a year.

A similar program has increased savings in Great Britain since 2002, but California would be the first state in the nation to enact it, said David Lesher, California program director for the nonprofit New America Foundation, based in Washington, D.C. A national savings program has been pending in Congress since 2005.

Under the bill, every child born in California after Jan. 1, 2008, would receive the money, regardless of their parents' income or immigration status. Recipients would repay the state's initial $500 investment once they turn 18.

The money may be used for three purposes: college or continuing education, a down payment on a home or a retirement account.

"This is the essence of equal opportunity. Every child, every person ought to get a head start," said Sen. Darrell Steinberg, D-Sacramento, who introduced the bill with Sen. Bob Dutton, R-Rancho Cucamonga.

About 566,000 children are expected to be born in California next year.

If families added $50 a month to the state's initial contribution, the savings account would grow to nearly $17,500 at 5 percent interest over 18 years. Steinberg said that would promote saving money in a culture that now is carrying record levels of debt and has the lowest savings rate since the Great Depression.

"It sounds like another give-away with other people's money — 'a chicken in every pot,"' said Jim Uhler, spokesman for The National Tax Limitation Committee in Roseville, a Sacramento suburb. "With the budget in the red again ... we have other pressing issues."

Dutton said the money would be "an investment in the child's future," said his spokesman, Larry Venus. "He looks at this as a hand up, not a hand out."

Steinberg said the state's $131 billion annual budget spends taxpayers' money on far more dubious programs.

"There's no question these are significant dollars," Steinberg said. "But look, we spend so much more on things that don't have nearly as much significant value."

The bill does not address what happens to the account if a child dies before turning 18.
 

REDDOGTWO

Unemployed Veg. Peddler
SUPER Site Supporter
Sounds like another bill to help all of the illegals in that state. Another reason for the people on welfare to have more kids, they will get paid for it.:puke1: :puke1: :puke1:
 

cj7

New member
sounds not too good to me..

another system to have to be tracked so more spending on management...and so on...

I thought that low rate student loans and other programs already gave us all a ' hand -up '



oh yeah and should I even mention how Social Security is working out....
 

Doc

Bottoms Up
Staff member
GOLD Site Supporter
REDDOGTWO said:
Sounds like another bill to help all of the illegals in that state. Another reason for the people on welfare to have more kids, they will get paid for it.:puke1: :puke1: :puke1:

Exactly. :pat: What are they thinking out on the left coast???????? :confused:
Sure seems like they are putting out the welcome mat trying to attract the illegals. Another example of truth being stranger than fiction.
 

California

Charter Member
Site Supporter
What are they thinking out on the left coast?????
There isn't really any 'they' here.

35+ million people. The school where my wife volunteers has 27 different languages spoken in the homes. Our governor is a naturalized American.

In other words, endless diversity all piled into one geographic area. Steinberg doesn't speak for 'the Californians'.

This is just another example of some individual's pet project and it won't get anywhere. Don't make the mistake of expecting that proposal represents California, or at least very many of us.

My own theory is 'follow the money'. I suspect some large East Coast investment house would like to administer this, for a fee of course, and found someone to raise their flag.

We need a soluion to the emergency rooms used as primary health care for many Californians, which is the underlying problem that this proposal addresses. But Personal Health Savings Plans funded at birth isn't the solution.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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I'm unclear about how the program which says it is supposed to be used for saving money college or a house downpayment has anything to do with healthcare?

That said, I suspect that California is probably correct about a big bucks firm pushing a pet project through so it can manage the money and take a piece of the action as its commission.

Still, no matter what it is it seems odd to me. I think they may want to do something a little different. It strikes me that if they want people to save money, giving them $500 is not going to stimulate savings. Why not make savings accounts for children (18 and under) tax exempt if direct deposited into the account from the parent's payroll, or otherwise deposited into the account, provided the money is not withdrawn until age 18? And for that matter, make the interest earned tax free up until 18 years old.

Further, if California gives a baby $500, and then expects it back at age 18, then it will get the same $500 back, but due to reality of inflation, that $500 is only going to be worth something like $150!?! Why not just give the kid $350 and tell him not to pay anything back?
 

Doc

Bottoms Up
Staff member
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I'm really surprised that the majority of the 35 million legal citizens of CA are not up in arms over this bill. Why did they specifically include illegals? Even without the illegals I do not think that bill is a good idea, but with the illegals it's plain crazy to my way of thinking.
 

California

Charter Member
Site Supporter
Doc said:
I'm really surprised that the majority of the 35 million legal citizens of CA are not up in arms over this bill.
Nothing to get excited about. Tomorrow it will be yesterday's news. Nobody cares since it obviously won't get anywhere.

I suppose it's a good talk-radio story to get people riled up in other parts of the country, but that's all it amounts to.

Ok, I read through the news to see what it is all about.

1) Never heard of the New America Foundation.

2) Children born in the US are US citizens, not Illegal Aliens. Always have been. That's a federal issue, not a California issue.

3) I added the health care stuff because I think that would be included in the final version or the first update.
I think if this thing ever moved toward being enacted, then the health care industry would want a claim on the funds. Watch for that in the next update! The health industry is a powerful lobby and there is a huge problem here of insured customers carrying the cost for uninsured people using the emergency room as their only health provider. There must be a half dozen other powerful interests who would want a claim on those accounts as well, and figure they deserve the money more than the kid. Maybe restitution for shooting victims? Imagine a list of claimants (who have lobbyists), and you will probably see it discussed eventually.
 
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Ironman

Well-known member
$17,500 at 5 percent interest over 18 years
I'd like to find out what savings account gets 5% back! Seems to me they are trying to encourage poor people to breed.
 

Doc

Bottoms Up
Staff member
GOLD Site Supporter
California said:
2) Children born in the US are US citizens, not Illegal Aliens. Always have been. That's a federal issue, not a California issue.

Good point CA. :pat: :pat:
 
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