A leading Senate Democrat is planning to draft legislation that would give every newborn a savings account with $500 as a step toward combating poverty.
Oregon Sen. Ron Wyden, who earlier this month became the chairman of the Senate Finance Committee, said universal savings accounts would "really put a dent in the poverty rate," Fox News reports
Wyden's plan may ultimately be based on a 2009 proposal by New York Democratic Sen. Charles Schumer, which outlined a plan to give all children born in the United States $500 toward the cost of college, buying a home, or for use toward retirement.
Under Schumer's proposal, up to $2,000 could be deposited into the account annually on a tax-free basis, and families with a median income would qualify for a federal match of up to $500 a year.
Wyden's plan would work at the federal level, but there are several similar initiatives operating at the state and local levels, according to Fox News.
San Francisco, for example, offers college savings accounts to every kindergartner, with each student receiving $50 deposited into a trust fund under the city's name. Low-income children may quality for more — up to $100 in some cases.
State officials in Hawaii are expected to consider a state Senate proposal that would establish and appropriate funds into what they call the Universal Children's Saving Account Trust Fund.
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