As this recent New York Times article pointed out, President Obama proposed in his State-of-the-Union-like speech that we must think about strengthening Social Security “while creating tax-free universal savings accounts for all Americans.”

This is an excellent idea. Over the long-term, people will need to increase their savings significantly, and it will work best if everybody has access to a savings plan. Obama’s proposal matches almost precisely a New America Foundation proposal to create a Universal 401 (k) system. My colleague Michael Calabrese has done some legwork here that is worth reviewing if anyone is interested in the details. I am a fan of starting this system at birth. We both believe you need to ensure that a system is created that facilitates the participation of low-cost plan providers. Calabrese believes that this system would work best if you create a clearinghouse for such providers. That way, people and employers don’t have to go around shopping blindly.

Of course, right now we don’t know if this type of system is contemplated or not. Details are still to be worked out. We do know that Gene Sperling offered up a similar idea during the Clinton years and he has returned as an advisor in the Treasury Department. We also know the work of Mark Iwry (Brookings) and David John (Heritage) from teh Retirement Security Project has gained stock and they support this policy concept generally. These are all positive developments.

As this conversation moves along, I will argue that there is no reason why we shouldn’t start these accounts as early as possible. We should make sure every newborn gets set up with an account, which can be used to facilitate the widespread provision of financial education, which they will need as adults. I’ll also argue that since people have multiple savings needs throughout their life course, there should be ways to access some of the resources well before retirement years. Savings and assets play a fundamental role in ensuring economic security and for many they provide the bridge to a secure retirement. These are arguments I look forward to making as the Obama team seeks to define what they mean by “universal savings accounts.”