East Idaho Times

Washington, D.C.--U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) delivered remarks at a hearing entitled “Child Savings Accounts and Other Tax-Advantaged Accounts Benefiting American Children.”

“Today’s hearing provides an important opportunity to examine the ways working families can save their hard-earned income for their children’s future,” Crapo stated.

Reflecting on recent legislative efforts, he noted, “Only two years ago, this Committee and others worked together in a bipartisan, bicameral fashion to expand retirement savings through the SECURE 2.0 Act. As we continue to monitor its implementation and the effects the law had on retirement savings, it is appropriate for us to explore other savings needs beyond just retirement.”

Crapo highlighted existing options: “Fortunately, Americans already have access to numerous savings options, whether it is saving for a specific purpose through a tax-advantaged account or saving through traditional savings vehicles.”

He elaborated on the benefits of tax-advantaged accounts: “Tax-advantaged accounts allow benefits such as tax-free growth and withdrawals, making it easier and more efficient to save for a specific purpose. For example, 529 accounts can help families save for their children’s education expenses. Health savings accounts and flexible spending arrangements can be used to help eligible individuals save for medical expenses. Dependent care FSAs can help workers save for expenses for dependents... And ABLE accounts help those with disabilities save for critical tools like assistive technology and transportation.”

Crapo also mentioned traditional savings methods: “Beyond these tax-advantaged accounts, Americans can also save through widely available traditional means, such as savings and brokerage accounts. And for children specifically, custodial accounts... can help teach children the ins-and-outs of saving.”

Addressing financial planning's importance, he said: “Any discussion concerning the options to save goes hand-in-hand with a conversation on the importance of planning and managing savings throughout one’s life... Part of that planning includes the need for many to consider seeking professional financial advice in order to create a comprehensive savings strategy.”

He acknowledged challenges faced by families due to inflation: “Effective planning becomes even more important at a time where Americans are experiencing inflation at levels not seen in decades... Higher costs of food, fuel and housing eat up families’ disposable income and squeeze their ability to save.”

Crapo concluded by addressing federal initiatives: “I also expect to hear testimony on child savings initiatives that some states have implemented... Expanding options to save is a worthy goal, but we must do so in a way that does not exacerbate already out-of-control government spending or create another unsustainable government program."

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