PPI Unveils Child Opportunity Account Proposal to Promote Financial Capability And Boost Upward Mobility for Working Families

January 27, 2025
Ben Ritz
Alex Kilander

WASHINGTON — Despite America’s long-standing reputation as the land of opportunity, social mobility in the United States has declined in recent decades, leaving millions of children from low-income families unable to climb the economic ladder. Many young Americans face a combination of limited access to resources and low levels of financial literacy, preventing them from fully realizing their potential. These structural barriers not only perpetuate inequality but also stifle economic growth by leaving untapped talent behind.

To address these challenges, the Progressive Policy Institute’s Center for Funding America’s Future today released a new report, “Building Opportunity and Financial Capability with Child Opportunity Accounts,” outlining an innovative new proposal for Child Opportunity Accounts (COAs) that would help young Americans build both the financial resources and knowledge that they need for long-term success. The report, authored by Ben Ritz and Alex Kilander, emphasizes how this program can complement existing anti-poverty initiatives while fostering self-sufficiency and economic opportunity.

“Other proposals to promote childhood savings don’t equip young Americans with the financial education needed to properly leverage and continue growing those savings,” said Ben Ritz, PPI’s Vice President of Policy Development and Director of the Center for Funding America’s Future. “PPI’s proposed Child Opportunity Accounts are a fiscally responsible, forward-thinking solution to give children from working families access to the same financial resources and skills-building opportunities enjoyed by their wealthier peers.”

Key Features of Child Opportunity Accounts:

Universal Accounts: Every child receives an account with a $700 initial balance at birth, managed by a private partner institution and invested in a diversified portfolio to generate strong real returns. This universality bypasses the administrative burdens of determining a child’s eligibility and builds political durability by ensuring that every family can benefit from a COA.
Progressive Government Contributions: Annual deposit of up to $700 for children in households earning less than 400% of the federal poverty line, giving the greatest support to those least likely to benefit from intergenerational wealth.
Integrated Financial and Civic Education: Integrated financial literacy resources, skills assessments, and use restrictions for young adults encourage beneficiaries to responsibly manage and grow their wealth. Additional accountability measures strengthen the civic compact by reinforcing young Americans’ responsibility to positively give back to the nation.
Fiscally Responsible: PPI’s COA proposal would cost less than half as much as other “baby bonds” proposals, doesn’t rely on expensive budget gimmicks or regressive tax incentives, and includes suggested offsets to ensure the wealth created by these accounts is not canceled out by a higher national debt.

“This isn’t just about providing financial assistance,” said Alex Kilander, policy analyst at PPI’s Center for Funding America’s Future. “By tying the program to financial education, we’re empowering young Americans to take charge of their futures.”

Read and download the report here.

Launched in 2018, the Progressive Policy Institute’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. To that end, the Center develops fiscally responsible policy proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, transform our tax code to reward work over wealth, and put the national debt on a downward trajectory.

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org