John Barrasso Questions Witness About The Benefits Of Universal Savings Accounts

4 months ago

During a Senate Finance Committee hearing on Tuesday, Sen. John Barrasso (R-WY) questioned witnesses about universal savings accounts.

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Transcript

00:00 next. Thanks, Mr. Chairman. Dr. Michelle, I want to talk about universal savings accounts.

00:07 During COVID, Americans saved a lot of money, over trillions of dollars. Unfortunately,

00:13 with high inflation, with higher interest rates, the savings dried up and now people

00:17 are carrying huge amounts of debt. I think we're talking about household debt of $18

00:21 trillion right now. In Wyoming, the average family is spending over $1,000 a month more

00:27 just to kind of stay up to where they were when this administration came into office.

00:32 So I think we need to look to find ways to turn the tide, help families build their own

00:36 financial security. Congress has come together to pass bipartisan retirement legislation

00:41 to help families save for retirement. I believe Congress can actually come together to help

00:45 working families save for the unexpected twists and turns that happen as a part of life. My

00:51 predecessor, Senator Craig Thomas of Wyoming, was a huge proponent of universal savings

00:55 accounts. You have described universal savings accounts as a way to help Americans put away

01:00 money for the future use and for emergencies. How do you think universal savings accounts

01:05 could complement what we've done in recent years on creating, expanding, and improving

01:09 retirement savings accounts? Thank you for the question. I think we've

01:14 heard today that 529s in particular have some complicated, can be complicated to set up

01:23 for some families to feel comfortable putting money into that is earmarked for a very specific

01:27 purpose in the future. Universal savings accounts give more families access to that same savings

01:35 incentive, that same type of account to put money away, but doesn't tell them they have

01:41 to spend it on education or save it for retirement. But instead, they could save for starting

01:46 a business. They could save for putting their child through college. But they could choose

01:52 to use that money for something else. So the flexibility allows people who don't want to

01:59 earmark their money for A, B, or C to save for the unexpected, save for a decision that

02:05 they've yet to be made in the future, sort of expanding the existing incentives we have

02:11 to more types of Americans who are saving for diverse needs.

02:15 When you talk about planning for the future and poor decisions made, I want to talk about

02:19 some poor decisions I think have been made by this administration, which has hurt our

02:22 economy. People are living with high inflation rates, high interest rates, and people are

02:27 feeling financially squeezed. That's what I heard this past weekend again. In Wyoming,

02:31 they're having to dig deeper to pay for things. They get less for their money. And so prior

02:36 to the pandemic and after the 2017 Republican tax reform, we saw the opposite of the current

02:42 reality of people really doing well. It was the best economy in my lifetime. In 2019,

02:50 real household medium wages increased by $4,000, largest increase in U.S. history. Lots of

02:55 people lifted out of poverty. So what impact would reversing some of the pro-growth tax

03:01 policies that we now have, that President Biden said if he's reelected, he's going to

03:06 get rid of all of those, what would that have on working families and those trying to save

03:10 their hard-earned dollars? Reversing the 2017 tax cuts, I think, would have two, you can

03:17 think about it in two different buckets. One is tax rates would go up on individual families

03:22 across the board, and that gives them less money to spend on whatever their priorities

03:27 are, including savings. Fully reversing the tax cuts would mean that businesses are again

03:34 uncompetitive globally. Before 2017, businesses were up and leaving the United States, moving

03:40 jobs and investment overseas. After the reform, we saw businesses increase investment, we

03:46 saw wages go up, we saw businesses expanding here in America. Undoing all of that, I think

03:52 we'd go back to that world where the U.S. and U.S. workers are globally uncompetitive,

03:59 and that would make our fiscal situation harder to solve, and it would make Americans writ

04:06 large poorer. Can you talk a little bit about savings and economic growth in terms of the

04:12 country? Can you speak about how boosting savings can help foster long-term sustainable

04:17 economic growth, and what benefits there are, not just at the individual and the household

04:21 level when they save money, but also at the national level? Savings is the foundation

04:26 of future investment. When you save money and it gets invested in a business that then

04:34 buys new machinery or invests in a new process, the people that work for those businesses

04:39 can be more productive, which then leads to wage growth. This is the foundation of economic

04:43 growth, is investment, which is fueled by savings. We should be doing everything in

04:48 our power to get the federal government and the tax code out of the way of savers and

04:53 investors as a way to ensure robust, long-run economic growth that benefits everyone.

05:00 Thank you Mr. Chairman.

John Barrasso Questions Witness About The Benefits Of Universal Savings Accounts

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