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New Brief Urges Congress to Make It Easier to Save

Congress is being urged to make it easier for low-income households to save. A new (AECF) brief says households of color are twice as likely to suffer from asset poverty in the Commonwealth. (Mike Clifford)
Congress is being urged to make it easier for low-income households to save. A new (AECF) brief says households of color are twice as likely to suffer from asset poverty in the Commonwealth. (Mike Clifford)
January 20, 2016

BOSTON - A new policy brief is urging Congress to make it easier for low-income families to save. The Annie E. Casey Foundation policy brief finds the racial wealth gap in America is growing.

The Foundation's Senior Associate Beadsie Woo says households of color are twice as likely to be experiencing asset poverty in the Commonwealth, and that is having a major impact on children.

"The racial wealth gap is growing, and that's putting children of color at a huge disadvantage," says Woo. "Policies that make it easier for families to save can go a long way to helping children have better futures."

According to the brief, single parent households are four-and-a-half times more likely to experience asset poverty in the Commonwealth. It recommends modest federal investment in universal children's savings accounts, started at birth. Depending on funding and participation, the Annie E. Casey Foundation says that could reduce the wealth gap by about 20 percent to as much as 80 percent.

The policy brief says Congress also should do more to promote home ownership. Woo says a pilot program in Massachusetts allows families moving into subsidized housing to increase savings along with earnings, so they can build a nest egg.

"We hope people are able to bootstrap their way from public housing or subsidized housing to full market-rate housing and then eventually, to home ownership," says Woo.

Massachusetts has eliminated asset tests for federal food assistance and home-heating programs. Woo says that means families don't have to spend down their savings in order to qualify for much-needed benefits.

"We see that those families are more self-sufficient because they have their own savings to draw on," she says. "Over time, the number of people enrolled in benefits decline."

The Casey Foundation says the Commonwealth could improve its ranking if it followed the lead of eight other states that have eliminated assets tests for the Temporary Assistance to Needy Families (TANF) program.

Mike Clifford, Public News Service - MA