Statement of Congressman Danny K. Davis Opposing H.R. 6757, the Family Savings Act
Only 39% of Americans have enough savings to cover an emergency costing $1,000. The median savings of workers earning the median income of $54,000 in my Congressional District is only around $2,000. The median savings of women is $2,000. The median savings of African Americans is $1,000 and of Latinos is $1,500. Yet this bill bestows tremendous tax benefits on the wealthy who can stockpile tens of thousands of dollars in multiple savings accounts, leaving the working class out in the cold.
When hard work in one or two jobs isn’t enough for most Americans to escape poverty because wages have stagnated for decades and because recovery from the Great Recession is concentrated in the small percentage of Americans who invest in the stock market - when we know that low- and moderate-income families have a harder time saving for college because they have less extra cash available to put away in a savings account, the Republican solution embraces the privileged and fails working families.
What is absent from this bill is telling – the 529 plan does NOT cover child care for apprentices, one of the number one costs they face with training. This bill throws crumbs to apprentices by allowing 529 plans to cover minor training expenses, like books and supplies. Given that employers pay for the coursework of apprentices, the remaining education costs are relatively small. This is why apprentice advocates asked for and why the original bill included coverage for child care. Yet, child care is NOT covered in this bill.
What also is absent is the Jenkins-Kind provision to help middle class families save for college by allowing employers to match up to $600 a year in 529 contributions, which could help families who can’t afford to put much aside for college increase their savings.
I cannot understand how – when our citizens are struggling under crushing student loan debt – the Republican solution is to allow the elite with impressive 529 plans to pay off their student debt while leaving the working class out in the cold. Absent is a true investment in helping working and middle class families pay for college.
I agree that we should help families cover the costs of needed health services to help students learn – such as speech and language services, occupational therapy, or physical therapy. Yet, rather than ensuring that insurance companies cover these health services that help students learn, the Republican solution is to allow the privileged with thousands of dollars in savings to pay for these costs while working and middle class families must forego these services for lack of funds.
When 67% of Americans say that they’ll outlive their retirement savings, the Republican solution to helping families pay for expenses associated with a new child or adoption is to undermine these families’ retirement security. The Republican tax approach gives corporations and millionaires tens of thousands of dollars directly, but working Americans must take money from their retirement.
Government should strengthen the economic security of working and middle Americans whose wages have stagnated, not the most secure. This bill fails that charge.