California approves ‘baby bonds’ to help tackle child poverty

Laura Guerra and her daughter Emilia reflect on her husband US Marine Lance Cpl.  Rodrigo children from low-income families who have lost a parent or caregiver to COVID-19. The legislature set aside $100 million in the state budget to be put into trust funds. (AP Photo/Damian Dovarganes)” title=”Laura Guerra and her daughter Emilia reflect on her husband US Marine Lance Cpl. Rodrigo ” rigo=”” guerra=”” uniform=”” framed=”” at=”” their=”” home=”” in=”” riverside=”” calif.=”” on=”” monday=”” july=”” passed=”” away=”” dec.=”” due=”” to=”” complications=”” following=”” a=”” monthlong=”” battle=”” with=”” covid-19.=”” california=”” has=”” approved=”” trust=”” funds=”” for=”” some=”” children=”” from=”” low-income=”” families=”” who=”” lost=”” parent=”” or=”” caregiver=”” the=”” legislature=”” set=”” aside=”” million=”” state=”” budget=”” put=”” into=”” funds.=”” photo=”” dovarganes=”” loading=”lazy”/>

Laura Guerra and her daughter Emilia reflect on her husband US Marine Lance Cpl. Rodrigo “Rigo” Guerra’s uniform framed at their home in Riverside, Calif. on Monday, July 11, 2022. Rigo Guerra died on December 24, 2020, due to complications after a month-long battle with COVID-19. California has approved trust funds for certain children from low-income families who have lost a parent or caregiver to COVID-19. The legislature set aside $100 million in the state budget to be put into trust funds. (AP Photo/Damian Dovarganes)

PA

Parenthood – that long chain of decisions that hopefully leads to a well-rounded adult – has always been a little less stressful for Laura Guerra because her husband, Rigo, was “100% in” for their daughter, Emilia .

But Rigo died of COVID-19 on Christmas Eve 2020, alone in a hospital room as Guerra watched helplessly through a window. Since then, left to raise her now 2-year-old daughter alone, Guerra’s mind hasn’t stopped racing.

“I’m constantly thinking,” she said. “Every decision I make, if I make the wrong decision, she’s going to suffer. And that scares me.”

Now California is using some of its record budget surplus to help ease the spirit of Guerra and others like her. Last month, California became the first state to pledge to create trust funds for children who have lost a parent or caregiver to the pandemic.

The money — $100 million in total — will go into interest-bearing accounts for children from low-income families who have lost a parent to COVID and for children who are in the United States foster care system. ‘State. State lawmakers have not decided how much money each child will receive, but an early proposal would give younger children $4,000 and older children $8,000. This would be enough to finance around 16,000 children, who could spend the money when they became adults.

“As a mom, it gives me a little bit of that security back,” said Guerra, who has advocated for trust funds as a member of the COVID advocacy group Survivors for Change. “I don’t want her to continue being a victim of this virus forever.”

The first US savings bonds were introduced in the 1930s to raise funds for the government and give ordinary Americans the opportunity to invest. These bonds were nicknamed “baby bonds” because parents often bought them for their children.

These modern baby bonds are different in that instead of being purchased by parents, the government gives the money for free to children in low-income families. Proponents have backed the idea as a way to help close the racial wealth gap between white and minority families, who were largely excluded from federal wealth-building programs during the Great Depression.

Hillary Clinton briefly included a baby bond proposal in her 2008 presidential campaign platform, and U.S. Senator Cory Booker introduced a nationwide baby bond bill to Congress that has yet to be passed. adopted.

The Washington DC City Council passed a Baby Bond program in 2021, pledging to give low-income children $500 plus an additional $1,000 each year as long as their parents stay below a certain level of income. revenue. Last year, Connecticut was the first state to approve a statewide baby bond program — though it has yet to be funded.

The idea is similar to guaranteed income programs that give low-income people money each month without any restrictions on how they can use it. California has several such programs locally, inspired by a high-profile demonstration project in Stockton that began three years ago.

While guaranteed income programs are about helping people with short-term expenses, baby bonds are about the future. Children could not touch the money until they reached adulthood. During this time, the money would grow by collecting interest payments from a bank.

The amount of money their children will receive depends on how long the account grows. For young children, advocates hope they will have between $20,000 and $40,000 when they grow up.

“Income and wealth are different things,” said Michael Tubbs, the former mayor of Stockton, who is now an adviser to Governor Gavin Newsom and founder of the advocacy group End Poverty in California. “People should be able to afford to pay their bills today…but the next generation shouldn’t have to live paycheck to paycheck.”

California’s baby bond program is the latest in a wave of new spending aimed at fighting poverty. Since 2018, California has spent $13 billion on a series of new laws and policy changes that have lifted an estimated 300,000 children out of poverty, according to a report released earlier this year by Grace, a nonprofit based in California.

These expenses include a $1,000 tax credit for low-income families with young children, a universal school lunch program, college savings accounts for low-income children, and a commitment to send all 4 year olds in kindergarten.

The group hopes California’s baby bond program is just a first step. His goal is for the state to eventually pay out trust funds to every child in the state born into a low-income family.

“The focus has always been, ‘How can we best help the future of low-income children?’ said Shimica Gaskins, President and CEO of Grace. “We’ve really relied on the educational pathways, but we also know that cash and in-kind support and opportunities are just as important.”

It is unclear whether the legislature would expand the program to include all children from low-income families. State Sen. Nancy Skinner, Democrat of Berkeley and chair of the Senate Budget Committee, said lawmakers will be watching the COVID Survivor Bond program closely to see how it works.

“The great irony of California in particular, but the nation as a whole, is that we have such wealth but it’s so concentrated,” Skinner said. “Anything we can do to address this income inequality is essential.”

The state treasurer’s office will manage the money in interest-bearing accounts. Once recipients become adults, they can spend the money as they wish. But advocates hope they’ll use it for things like a down payment for a house, college tuition or a car.

Guerra said she doesn’t know how her daughter will use the money once she’s old enough to spend it.

“I’m doing everything I can to point her in the right direction and make her a good human being, aren’t I?” she says.

For now, she is focused on having her daughter, Emilia, remember her father. So far, his efforts seem to be paying off.

Emilia Guerra sees her dad everywhere. It’s in the frames on the walls of his room. He’s on his mother’s phone screen. And he’s in the recesses of her 2-year-old mind, showing her face at scattered times in her hectic life.

“Randomly we’ll be sitting somewhere and she’s like, ‘Hey dad! ‘” Guerra said. “I tell him that mum can’t see dad. But maybe she can.

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