Defunding a Pathway to the American Dream
Mae Watson Grote | Founder and CEO | The Financial Clinic
We learned on Monday that Congress has approved a budget that eliminates funding for Assets for Independence (AFI), a crucial government program that gives struggling low-income families the opportunity to achieve the American dream. As somebody who has spent her entire career working for economic justice and a more inclusive economy, I am struggling to find a way to describe my reaction to this news: Discouraged, dismayed, or devastating hardly seems to cover it.
Every day we see customers who are working hard — multiple jobs, low wages, volatile hours — and yet they struggle to pay the rent or feed their family, much less invest in their future. The sobering reality of their immediate economic needs often stifles their larger dreams of owning a house or starting a business because of the financial chasm that lies menacingly in front of them, impeding that first step towards saving for anything more than next month’s rent.
For nearly two decades, AFI has forged that gulf through matched savings accounts: Individual Development Accounts (IDAs). IDAs are a critical tool for working poor Americans to build financial security by matching earned income deposits dollar-for-dollar to use towards life-changing assets: purchasing a first home, capitalizing a business, or funding post-secondary education or training. The matching funds are accompanied by support services, like financial education, credit repair and counseling, and guidance in obtaining tax credits. IDAs are particularly powerful because they recognize and address the stark reality that average incomes for so many American families leaves a gaping hole in their ability to afford a home or college education, crucial assets for building financial security for generations to come.
Simply put, we know that the absence of assets in low-to-moderate income families represents a fundamental barrier to economic mobility. The evidence also points to the fact that AFI does extraordinary work in helping Americans build their future. Without the latter, the former’s ability to achieve this on their own has just been become unnecessarily more difficult.
The Clinic stands with the principles of AFI;we will strive to not lose hope in these far-too-often trying times. Despite this devastating news, our work continues because the communities who need us most will continue to depend on our support and advocacy. Financial security, economic mobility, and the pursuit of a more inclusive economy are basic human rights that cannot be ignored, regardless of whether our current Congressional leadership rightfully recognizes them as priorities.