Debuting the Assets Report 2011

Every year the Asset Building Program conducts an analysis of the federal budget to provide a more complete understanding of how the federal government encourages the accumulation of assets for families up and down the economic ladder. We seek to shine a light on what policy levers are deployed, who benefits from these programs and policy efforts, and how recent legislation potentially alters the landscape.

In that pursuit, we present The Assets Report 2011, an assessment of federal policies and programs to promote asset building opportunities. Our analysis finds:  

• In Fiscal Year 2012, the President’s budget proposes a total of $519 billion in resources to promote asset-building opportunities. This includes $46 billion in direct spending and $473 billion in subsidies delivered through the tax code.  
   
• The federal government will allocate $209 billion in resources to subsidize homeownership and $147 billion for retirement security. $57 billion will be devoted to post-secondary education, $357 million for entrepreneurship, and $106 billion to savings and investment activities.  
   
• The total tax subsidies for asset building in Fiscal Year 2012 are worth $473 billion, which overwhelmingly accrue to middle- and upper-income Americans.  
   
• Tax refunds, which are returned to many households after they file their taxes, represent a significant asset for many families. The combined value of the Earned Income Tax Credit and the Child Tax Credit is $65 billion, $46 billion of which are delivered as tax refunds. 

By any account, these are substantial sums; however, the efficacy of these policies is less contingent on the scope of the resources being allocated as the scope of households who benefit from those resources. Those families with lower incomes and fewer resources receive a small fraction of the total resources in play, while those with higher earnings receive the lion’s share.

The release of this year’s report coincides with the broader consideration of federal spending priorities in the context of deficit reduction. As Congress and the Administration discuss options for long-term fiscal reform, they should recognize that targeted policies which enable a greater degree of savings by those at the bottom of the economic ladder are investments that pay off down the line. Not only can these types of policies increase financial security of families still struggling to rebuild their balance sheets two years after the official end of the Great Recession but they can help families achieve economic mobility and invest in their future. We invite you to consult another of our publications, The Assets Agenda, for a fuller description of ideas on how to implement a more inclusive set of savings and asset-building policies to benefit all Americans, but especially those with lower-incomes and fewer resources.