Cory Booker’s ‘baby bonds’ giving $1,000 per newborn could get a new life in a Democratic Congress

U.S. Sen. Cory Booker on Thursday proposed legislation that he prominently featured in his unsuccessful presidential campaign: A $1,000 savings account for every newborn American.

Known as “baby bonds,” the government would add up to $2,000 every year depending on income. Recipients could begin withdrawing money from their accounts at age 18, giving them a nest egg to tap to spend on things like a college education, a downpayment on a home, or start a small business.

The funds would sit in a U.S. government account paying around 3% interest, and Booker, a Democrat, said the money would help narrow the economic gap between rich and poor. During the presidential campaign, he said his proposal could give children as much as $50,000 in the bank by the time they finished high school.

“In a country as wealthy as ours, every person should have access to economic opportunity and the chance to build assets and create wealth,” Booker said.

The bill went nowhere in the last Congress, though Booker touted it on the campaign trail. This year, the Democrats control both the House and the Senate, and Senate Majority Leader Chuck Schumer of New York is among the sponsors.

“Giving our youngest Americans and their working parents an economic opportunity like baby bonds would deliver strong economic relief and mark an investment in our collective future,” Schumer said.

Several of Booker’s fellow unsuccessful rivals for the 2020 Democratic presidential nomination also are sponsors: Elizabeth Warren of Massachusetts, Amy Klobuchar of Minnesota, Kirsten Gillibrand of New York, and Bernie Sanders of Vermont.

Rep. Ayanna Pressley, D-Mass., is leading the effort in the House.

Gov. Phil Murphy has proposed a similar plan, providing $1,000 to every baby born in the state in 2021 to families with income below 500% of the federal poverty level. The cutoff for a family of four would be $131,000, according to the state Treasury Department. Following the pandemic, it was not included in the state budget.

Jonathan D. Salant may be reached at jsalant@njadvancemedia.com. Follow him on Twitter @JDSalant.

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