New program would make unprecedented investment aimed at eliminating the District’s racial wealth gap
For Release: Tuesday, May 4, 2021
Contact: Malcom Fox, 202-227-1701, mfox@dccouncil.us
Washington, DC – Yesterday, Ward 5 Councilmember Kenyan McDuffie introduced the Child Wealth Building Act, a child trust fund or “baby bonds” proposal aimed at eliminating the District’s stark racial wealth gap and ending generational poverty. In the District, a white family’s median wealth ($284,000) is 81 times higher than the median wealth of a Black family ($3,500). If passed, the child trust fund proposal would ensure that every baby born in the District has tangible economic, educational, and entrepreneurial opportunities to succeed.
“Residents of color have waited long enough for the transformational change necessary to achieve racial equity,” said Councilmember McDuffie. “We must be bold and intentional about closing the racial wealth gap and investing in historically underserved communities. If passed, this baby bonds proposal would codify economic opportunity as a birthright for all Washingtonians.”
The Child Wealth Building Act would provide a District government-sponsored trust fund for babies born in the District into a household whose income does not exceed 500% of the Federal Poverty Level, currently $132,000. Enrollment would be automatic and each eligible child would receive an initial deposit of $1,000 followed by annual supplemental payments up to $2,000 depending on household income. Upon turning 18, the child may withdraw the funds for specified purposes including education, business ownership, business investment, property ownership, and retirement investments.
“DCFPI applauds Councilmember McDuffie for proposing a bold ‘baby bonds’ program to help reduce the District’s stark racial wealth gap, which is robbing generation after generation of Washingtonians access to mobility and opportunity,” said Tazra Mitchell, DC Fiscal Policy Institute’s Policy Director. “This legislation will give the next generation a head start, grow Black mobility and wealth in Chocolate City, and forge a more antiracist, resilient, and equitable future,” she said.
Councilmember McDuffie requested $20M to fund a “baby bonds” initiative in his FY22 budget letter to the Mayor. Baby bonds rose to prominence as the centerpiece of Senator Corey Booker’s presidential campaign but remain unimplemented at the local or federal level. If passed, this proposal would be one of the most significant laws ever passed by the D.C. Council to eliminate the District’s stark racial wealth gap.
