Savings

Last night I had the chance to attend an advance screening of “A Place at the Table,” a new documentary about hunger in America. Drawing upon the perspectives and experiences of families struggling with hunger around the country, the film takes a critical look at the agricultural policies and political failings that have contributed to insufficient levels of public benefits, a preference for charity organizations over government programs, and a significant increase in childhood obesity rates. With WIC (a nutrition program that serves women, infants and children) on the chopping block as part of the looming sequester and SNAP under threat in the ongoing Farm Bill debate, “A Place at the Table” is an important call to action to preserve and strengthen our nutrition assistance programs.

Two events this week explored some important policy territory for government supported retirement savings accounts. First, at the Center for American Progress Action Fund, a panel of experts and policymakers met on Tuesday to discuss the future of retirement security in light of proposed cuts to Social Security, the marked shift from defined benefit to defined contribution plans, and the possibility of state-level action to ensure greater access to savings opportunities. Yesterday, an event at Brookings explored the implications of a recent study suggesting that tax incentives may be an ineffective tool for promoting retirement savings. While each discussion featured a range of perspectives, both highlighted the success of default features like automatic enrollment and explored the potential of retirement accounts tied to the worker rather than the workplace. Still, the question remains: how can retirement policy effectively help workers both contribute to their accounts and maintain their balances until retirement age?

Updated 3/4/13: The deadline for proposals to present at NCTC's annual conference in September is coming up this Friday March 8th. See the details below and contact NCTC with any questions.

The National Community Tax Coalition (NCTC) is holding its 9th national conference in New Orleans September 10-13, 2013. This year’s conference centers on advancing, sustaining and growing the community tax preparation and asset building field. In particular, the conference will focus on the role the Volunteer Income Tax Assistance (VITA) field and asset building community more broadly can play in shaping best practices, research priorities, and policy implementation.

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include housing and homeownership, savings and debt, consumer protection, and inequality.

Anne Kim, Senior Policy Strategist at CFED, has a piece today in the Washington Monthly that looks at the flaws in our current retirement savings landscape. In short, our current system just isn't meeting the needs of many Americans, who have a variety of short, medium and long term savings needs. Our current "toolbox" of retirement savings options simply isn't meeting this diverse range of needs, as evidenced by recent reports that over a quarter of Americans have made withdrawals from their work-based retirement accounts for non-retirement needs. As Kim explains, "For many people, employer-sponsored retirement plans are the only mechanism “forcing” them to save. Yet the retirement-only focus of the current system isn’t versatile enough to meet people’s real needs—especially to cope with emergencies such as a job loss or a horrifically expensive car repair."

Yesterday, the Corporation for Enterprise Development (CFED) released its annual Assets and Opportunity Scorecard, a key resource for asset building researchers and policymakers that documents data points that indicate the financial health of Americans, including asset poverty rates, household net worth, and the number of unbanked/underbanked households. One of the Scorecard’s most frequently quoted figures is the liquid asset poverty rate, which represents the the number of families who lack the savings needed in order to live at the poverty line for three months in the absence of income. We know that asset limits in safety net programs discourage saving, and that families who lack savings are subject to increased hardship in the event of an income loss. So what’s the relationship between liquid asset poverty and asset limits? Are administrative rules mandating that families subject themselves to liquid asset poverty and potentially increased hardship in order to maintain eligibility for safety net assistance? Let’s compare this year’s asset poverty data to what we know about the asset limits in safety net programs.

Today is a big day for the asset building community. Our friends at CFED have released their newly updated 2013 Assets and Opportunity Scorecard which evaluates household financial security across the U.S. and grades states on how well or poorly they support asset development and promote opportunity. 

As has been true in recent years, the key finding is that huge swaths of the population are living in a precarious state of "asset poverty." As our Justin King told the Huffington Post: “These are households and individuals that are living paycheck-to-paycheck. And without savings, you’re one misstep away from financial disaster.”

By Katie Stalter, Center for Social Development

This was originally posted on The Center for Social Development's site.

New America's Education Policy Program has a new report out today that presents a comprehensive package of reforms to the existing federal student aid system for higher education. The Education team makes a compelling case for the need for reform:

In short, the present federal financial aid system is no lon­ger up to the demands of the times. It was built in a differ­ent era and has evolved haphazardly over the decades, in response to fiscal exigency and interest group pressures. It has become unwieldy, inefficient, and overly complicated, in a way that wastes taxpayer dollars and fails to provide institutions and students with the resources and incentives they need to complete high-quality college degrees....Taxpayers and students need an aid system that is simpler, more understandable, more effective, and fairer.

In particular, they propose reforms that dramatically strengthen the Pell Grant program, simplify the federal student loan program, eliminate education tax breaks which currently favor higher-income families, boost programs that support disadvantaged middle and high school students, and make institutions of higher education more accountable to both students and taxpayers.

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include inequality, the safety net, and self-sufficiency.