BOSTON - In an effort to close the racial wealth gap, the Massachusetts Legislature is considering a bill creating a new way for families to build assets for their newborn children and create generational wealth.
What You Need To Know
- Treasurer Deb Goldberg is strongly supporting a "Baby Bonds" bill
- "Baby Bonds" are a government-funded trust for infants who can access the funds when they are 18
- Children who grow up in foster care or are a part of the TAFDC program would be eligible
- The money could go to asset building endeavors, like buying a house or starting a business
“White households in Massachusetts had an average of $250,000 in assets, Black households had $8," said state Treasurer Deb Goldberg. "That’s not a typo, $8. That paradigm continues generationally because there is no getting ahead of that.”
Goldberg testified Tuesday explaining her "Baby Bonds" bill. It was created with the goal to create access to cycle-breaking funding.
Baby bonds are a financial investment made by the government on behalf of a newborn baby that is in DCFS foster care or in the Transitional Aid to Families with Dependent Children Program (TAFDC).
The funds would then be accessible to the child when they turn 18 and can be used to support creating assets to gain value over time, like buying a home or starting a business, something Goldberg said has been a difficult obstacle and contributes greatly to systemic racism.
“This vehicle breaks down a situation that we’ve seen has been impossible to break through for those who have had no access to the ability to create assets,” Goldberg said.
Baby bonds have been introduced on a federal level as well. In Massachusetts, they are being considered by committee and are expected to progress this session.