Asset Building Policy

ASSET BUILDING POLICY

Jeremie GreerDirector of Government Affairs Corporation for Enterprise Development April 24th, 2013

www.cfed.org@CFEDNews

About CFED

CFED (Corporation for Enterprise

Development) empowers

individuals and families to build

and preserve assets by

advancing policies and strategies

that help them go to college, buy

a home, start a business, and

save for now and for the future.

Identify Good Ideas: CFED’s researchfinds ideas with potential for making theeconomy work for everyone, particularlythose on the margins.

Develop Partnerships: CFED works in partnership with diverse organizations across the country to promote lasting change.

Bring Ideas to Scale: CFED brings together community practice, public policy and private markets to achieve the greatest economic impact.

We combine the vision of a think tank with real-world experience to:

Agenda

1. Define the problem

2. Political/Budget Environment

3. CFED Policy Priorities

4. “All Politics is Local”

Driving policy change for more than 10 years

20122007

Families are living on the edge

Liquid Asset Poorlack savings to cover basic

expenses for three months if job loss, a medical

emergency, or other crisis leads to a loss of stable

income

26% of households earning between

$55,000 and $90,000 are liquid asset poor

Savings and wealth gap for households of color

Households of Color

White Households

Liquid Asset Poverty

Liquid Asset Poverty in Oregon

Political Environment

Drivers of the Deficit

Sequestration

On March 1, the president issued a sequestration order requiring $85 billion to be cut from the federal budget

Cut to nondefense spending of $42.7 billion Reduced from $54.7 billion, or to 5.0 percent

Medicare cuts ($11.1 billion) comprise about 26 percent of the total nondefense cut

Agency Effects of Sequestration

Department/Agency Percent Cut

Total Cut (dollars in millions)

Health and Human Services 5.0% $15,877

Agriculture 5.0% $1,944

Labor 5.1% $3,149

Housing and Urban Development 5.0% $3,013

Education 5.0% $2,479

CFED Policy Priorities

Budget

Program FY 2012 Appropriations

FY 2014 President’s Budget Request

Asset for Opportunity $19.9 Million $19.4 Million

LIHEAP $3.5 Million $2.8 Million

Community Services Block Grant

$681 Million $350 Million

CDFI Fund $222 Million $225 Million

WIA Adult Employment and Training

$771Million $791 Million

CDBG $2.9 Million $2.8 Million

GEAR UP $304 Million $302 Million

Rural Development 502 Direct Loans

$900 Million $360 Million

Savings Priorities

Reauthorize and reform the Assets for Independence Act Create new child savings opportunities through the federal

government Integrate child savings into existing federal funding streams Reform asset limits in SNAP, TANF, and SSI Expand tax time savings opportunities—protect the EITC,

CTC, and paper savings bonds Expanding access to retirement savings for low and

moderate income individuals Expand and protect tax incentives for savings for low

and moderate income individuals

Financial Inclusion Priorities

Integrate asset building into existing federal funding streams

Enhance accessibility to financial products for the un/under banked (e.g.Bank-on USA, Savings Bonds, etc…)

Curb predatory lending practices Enhance access and impact of financial

capability and education initiatives

Homeownership Priorities

Take the Manufactured Housing agenda to the next level of advocacy

Explore CFED’s role in the larger housing finance reform discussion

Entrepreneurship Priorities

Expand access to capital for microenterprises and self-employed individuals

Identify and address barriers to success for special populations of entrepreneurs—immigrants, racial/ethnic minorities, women, low-income and first-time entrepreneurs

Eliminate barriers to microenterprise growth throughout the business lifecycle

Assets for Independence

Low Hanging Fruit Aligning eligibility with

other Fed. Programs Diversifying eligible

matching sources. Expand eligible uses

(i.e. children’s savings) Revise first-time home

buyer to include women escaping domestic violence.

Burden Too Heavy $75 Million (current

appropriation is 20 million)

Higher match rate Series of smaller

changes that make bill longer

Asset Limits Reform

Lift Asset Limits in Public Benefit ProgramsAsset limits are a relic of entitlement policies that, in some cases, no longer exist. Personal savings and assets are precisely the kind of resources that allows families to move off public benefit programs.

36 states have eliminated Asset Limits in SNAP

6 states have eliminated asset limits in TANF

24 states have eliminated Asset Limits in Medicaid, all must do so by 2014

Note: Ryan Budget seeks to eliminate state flexibility on SNAP asset limits.

The US Tax Code is central in helping individuals grow assets and accumulate wealth Mortgage Interest Deduction Special Rate for Capital Gains Credits for Children and

Earned Income Business related credits and

deductions

Comprehensive Tax Reform

$1–5,000

$5,000–10,000

$10,000–15,000

$15,000–20,000

$20,000–25,000

$25,000–30,000

$30,000–35,000

$35,000–40,000

$40,000–50,000

$50,000–60,000

$60,000–70,000

$70,000–80,000

$80,000–90,000

$90,000–100,000

$100,000–150,000

$150,000–200,000

$200,000–500,000

$500,000–1,000,000

$1,000,000 or more

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

0 FY2009 Distribution of Asset Building Subsidies,Average Benefit by Income Bracket

Annual Income

Source: CFED and Annie E. Casey Foundation. 2010. Upside Down: The $400 Billion Federal Asset Budget

Distribution of federal asset-building tax subsidies

$1–5,000

$5,000–10,000

$10,000–15,000

$15,000–20,000

$20,000–25,000

$25,000–30,000

$30,000–35,000

$35,000–40,000

$40,000–50,000

$50,000–60,000

$60,000–70,000

$70,000–80,000

$80,000–90,000

$90,000–100,000

$100,000–150,000

$150,000–200,000

$200,000–500,000

$500,000–1,000,000

$1,000,000 or more

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

0 FY2009 Distribution of Asset Building Subsidies,Average Benefit by Income Bracket

Annual Income

Source: CFED and Annie E. Casey Foundation. 2010. Upside Down: The $400 Billion Federal Asset Budget

Distribution of federal asset-building tax subsidies

Recommendations for Comprehensive Tax Reform

• Continue to ensure access to the Earned Income Tax Credit and Child Tax Credit for working families

• Provide a stronger savings incentive.

Make existing Saver’s Credit Refundable Expand the Saver’s Credit to non-retirement accounts, such

as college savings or short-term savings accounts • Support Volunteer Income Tax Assistance (VITA) sites and other

free or low-cost tax preparation strategies.

“All politics are local”Thomas Phillip “Tip” O'Neill

Former Speaker of the House of Representatives

A&O Network

Assets & Opportunity Network Structure

Network Steering Committee Guides direction of Network

Lead Organizations36 State Organizations and 39 Local Organizations

General Members900+ General Members representing 49 states and DC

General Members

Lead State and Local

Organizations

Network Steering

Committee

Lead State & Local Organizations in the A&O Network

OREGON Lead State

Organization:

Lead Local

Organizations:

Join the Assets & Opportunity Network as a General Member!

Stay informed Share your experiences Participate in intensive learning

opportunities Engage in national dialog on

asset-building solutions Access responsive technical

assistance Be eligible for event scholarships Build your communications skills

To join or learn more, go to assetsandopportunity.org/network

Representing Oregon in Congress:Your Delegation!

Appropriators Sen. Jeff Merkley

Banking Sen. Jeff Merkley

Health and Human Services, Labor and Education Rep. Suzanna Bonamici (D-OR)

Tax Sen. Ron Wyden (D-OR) Rep. Earl Blumenauer (D-OR)

Jeremie Greer

Director of Government Affairs

202-870-6821

jgreer@cfed.org

www.cfed.org

www.assetsandopportunity.org

Thank You

Asset Building Policy

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