President Obama’s budget lays out a strong starting point for rebuilding American opportunity. He preserves our historic commitment to protect the nation’s most vulnerable households, reverses some of the most harmful impacts of sequestration, and calls for a sensible, balanced approach to reducing the federal deficit.
In particular, the President should be applauded for his commitment to the success of the Consumer Financial Protection Bureau, which in the short period of its existence has already made huge strides in protecting consumers against predatory financial products and empowering them to build savings and financial security.
The President’s budget also calls for sustaining the nation’s investments in education by increasing access to high-quality early childhood education, improving the nation’s high schools and making college more affordable and attainable, especially for low-income students. The budget also maintains a commitment to fund programs that have been vital to the efforts of low- and moderate-income families who have been striving to save and build wealth. These vital programs include the Community Development Block Grant, the Community Development Financial Institutions Fund, the Earned Income Tax Credit, the Child Tax Credit and the Assets for Independence program, which has helped more than 70,000 low-income families open special matched savings accounts to help them buy a home, launch a business or pay for school.
But the President’s budget could also do more to ensure that low- and moderate-income households have full access to the tools they need to achieve financial security. While the budget includes a laudable commitment to simplify the tax code to make it more fair, it should include as part of that commitment an effort to broaden tax incentives for savings for the low- and moderate-income households who now get virtually no benefit.
In addition, the budget should contain an explicit commitment to help households save, build wealth and improve their financial capability. As CFED’s 2013 Assets & Opportunity Scorecard found, as many as 44 percent of households in America lack the cash savings to survive three months at the federal poverty line in the event of a loss of income.
For example, the President did not request funds for Bank On USA, an innovative effort in multiple cities across the nation to connect households without bank accounts to the financial mainstream, as he has in his past budgets.
CFED looks forward to working with the President and Congress to improve the financial security of America’s households and expand economic opportunity for all families.
(This post is part of a series on the president's 2014 budget.)
(Photo Couresty of Justin Sloan CC BY-ND-NC)