WASHINGTON, D.C. - U.S. Senator Cory Booker (D-NJ) today announced new legislation aimed at giving every American child a fair shot at economic mobility.

The American Opportunity Accounts Act aims to mitigate the growing wealth gap between American families by creating a seed savings account for every American child when they are born. The funds would sit in an interest-bearing account that would receive additional deposits each year depending on family income. At age 18, account holders could access the funds in the account for allowable uses like buying a home or paying for educational expenses. The legislation is fully paid for by making common sense reforms to federal estate and inheritance taxes, including by restoring 2009 estate tax law.

“Everyone in America should have a real shot to succeed, but federal policy over decades and an upside down tax code that heaps benefits on the very rich and big corporations have grown the gap between those who have much and those who have little,” Booker said. “Today, nearly one in three American families have zero to negative wealth, and it’s hard to get ahead if you begin life behind the starting line.”

“This bill would create a savings account for every single American child born, that can be used for buying a home or paying for higher education by making common sense changes to estate and inheritance taxes, like restoring 2009 estate tax rates. This proposal is about helping families break through barriers that keep so many Americans from wealth-creating opportunities like higher education and home ownership. Combined with other tax policy changes, like an expansion of the earned income tax credit, this bill will help level the playing field in our country to ensure that every child has a chance to live their version of the American dream.”

Because household wealth shapes opportunity, extreme wealth inequality in America undermines equal opportunity. Wealth is primarily passed down from one generation to the next, and our history and laws deepen rather than shrink wealth inequality. Generations of subsidizing the richest households have entrenched an extraordinary wealth gap, especially by race.

The gap in wealth between the richest Americans and the middle class has grown dramatically in the past 50 years. In 1963, families near the top had six times the wealth of families in the middle; by 2016, they had 12 times the wealth. There is also a pernicious racial wealth gap in America. In 2016, the median black family had about $17,000 in wealth compared to the typical white family who had about $170,000.

Booker will formally file the bill when the Senate reconvenes in November.

Specifics of the American Opportunity Accounts Act:

At birth, every American child would be given an “American Opportunity Account” seeded with $1,000. Each year, children would receive up to an additional $2,000 deposit into their American Opportunity Account, depending on family income. These funds would sit in a federally insured account managed by the Treasury Department, achieving roughly 3 percent interest.

Account holders may not access the money until they reach age 18 and will only be able to use the funds for allowable uses like homeownership and higher education — the kind of human and financial capital investments that changes life trajectories.

Estimated of size of American Opportunity Account at Maturity, by household income


Income for family of 4

Supplemental payment amount

Est. account balance for 18-year old ($2019)

<100% of FPL




125% of FPL




175% of FPL




225% of FPL




325% of FPL




500% of FPL