A bill aimed at giving every American child a financial head start in life has been introduced in Congress by Rep. Dean Phillips (D-MN), Think Advisor reports.
Known as the American Dream Accounts Act of 2024, the measure would establish within the Social Security Administration a $5,000 account for each child, to be invested in an index fund, grow with compound interest, and vest upon graduation from high school, achievement of a GED, or waiver for disability.
“Fulfilling the promise of our great nation requires that everyone have a chance at the American Dream. This legislation provides every American child the opportunity to flourish and realize their full potential,” said Rep. Phillips. “Investing pays dividends, and it is time to bet on the American values of self-determination and opportunity for all by passing the American Dream Accounts Act.”
The bill, H.R. 9881, assumes a 10% annual rate of return – comparable to the historic performance of the S&P 500. According to Phillips, beneficiaries will receive a windfall of approximately $25,000, which can be used for such purposes as growing a nest egg, placing a down payment on a home, paying for education or living expenses, or to start a small business.
Under the legislation, the SSA commissioner would set up the account for every newborn and child naturalized before age 18, to be invested in an S&P 500 or comparable index fund and be managed by the Social Security Administration.
“Students will track the performance of their portfolios with a mobile application and the Department of Education will develop best practices for teaching financial management, investing, and entrepreneurship education in public schools,” said Phillips.
“America remains the land of opportunity, but living the American Dream often requires financing,” said John Dearie, Founder and President, Center for American Entrepreneurship. “Whether the goal is college, buying a home, or launching a business, start-up capital helps turn opportunity into reality. Every American child deserves to share in our nation’s promise, and American Dream Accounts will serve as a down payment on that promise.”
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