America needs a 21st Century GI Bill

By Harold Ford, Jr. and Al From, DLC Ideas Primary:

America is rooted in the belief that with opportunity comes responsibility-that each citizen willing to work hard and invest in the future should be given the chance to grow and succeed. To address the nation’s toughest challenges, and repair our fraying social fabric, we need to return to that founding principle. That can be accomplished by crafting a 21st Century GI Bill of Rights.

Here’s how it would work. The federal government would deposit $5,000 in the name of every newborn U.S. child into a tax-free, college education-type fund. Families would be encouraged to supplement it with additional payments. Through the miracle of compound interest, that fund would be worth nearly $17,000 by the time the child reached college age-even if a dime was never added to the account. A family that contributed just $100 a month would, 18 years later, have an additional $60,000. The money could be tapped any time between the ages of 18 and 25 to pay for college, start a business or buy a first home.

To access the government’s contribution (with interest), however, a person would have to commit to one year of civilian or military service. If the person declined to serve, he or she could, of course, withdraw any additional funds contributed to the account. But the federal contribution would return to the Treasury.

That’s all there is to it: a basic bargain between [1] Washington and every child born as a U.S. citizen. Government will invest in your future, but to redeem that investment you have to serve your country.

That’s a bold idea that’s rooted in history. Nearly half of the 16 million Americans who served in the Armed Forces during World War II used the GI Bill to improve their education-and 11 million bought homes. It’s no exaggeration to say that the GI Bill was instrumental in building the middle class as we know it now.

A new GI Bill could have a similar, dramatic impact on America. Many young Americans would choose to serve in the military, providing the armed forces with the leadership and talent they badly need. Others would join AmeriCorps or the Peace Corps, providing invaluable civilian service.

A new GI Bill would offer more young Americans the chance to go to college. Over a lifetime of work, a college graduate earns nearly $500,000 more than a high school graduate. But the cost of college keeps going up, and providing every child a personal savings account from birth would make it possible for millions more to attend.

Critics will undoubtedly say it’s too expensive-the same charge they used against the GI Bill seven decades ago. But history has shown that the GI Bill has generated $7 in economic benefit for every $1 invested, and that it provided an education for three U.S. presidents, three Supreme Court justices and 14 Nobel Prize winners.

Moreover, because the new version would be designed as a defined contribution program rather than a defined benefit, its long-term cost would be reduced: A $5,000 investment at birth will be worth much more when it is withdrawn because of compound interest. Over time, money not claimed by those who chose not to serve would be recycled (with interest) to lower the cost of the program.

This proposed bill is not a panacea for all of our nation’s ills. But it could be a cornerstone idea, restoring the basic bargain of opportunity and responsibility that has made America the most prosperous country on Earth.

NOTE: This piece originally appeared in the [2] Chicago Tribune.

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Article printed from Ideas Primary: http://www.ideasprimary.com

URL to article: http://www.ideasprimary.com/?p=486

URLs in this post:
[1] Washington: http://www.chicagotribune.com/topic/us/washington-PLGEO100104900000000.topic
[2] Chicago Tribune: http://www.chicagotribune.com/news/opinion/chi-oped_0321_gi_newmar21,0,6204315.story

--DLC IDEAS PRIMARY; courtesy of Frank Leidermann, Acting Editor

Comments

[eric schansberg]

I have an idea that is:
a.) much closer to the G.I. Bill idea
b.) much cheaper (actually reducing govt expenditures)
c.) would deal with the root of such problems
d.) would deal with the tremendous injustice of forcing the poor and the lower middle-class to deal with a government monopoly

What is it? Vouchers for education, allowing school funding to go with parents and children rather than to the producers. (Vouchers of $3000 could be adjusted for income levels [more for the poor], grade level [more for higher grades], disabilities, etc.) It would be far less than the $10K we spend now per student. And would one have more faith in a competitive market or a government monopoly to provide quality and be attentive to consumers?

I hope and pray that Ford, From, and friends are able to put aside the preferences of a special interest group that wants to preserve its monopoly power.