CT First in Country to Pass Baby Bond Program

 In July 2021, Connecticut became the first state in the country to pass a statewide baby bond program. It has many strings attached but is ultimately a step forward.

by Mick Theebs

It is a rare thing for Connecticut to blaze the trail. Even in “progressive” New England, Connecticut has long been one of the most conservative of the blue states due in no small part to our home being a hub for the insurance and finance industries. However, despite this reputation of being a follower, Connecticut became the first state in the union to put in place a Baby Bond Program this past July

At the most general level, a baby bond program is one where the government gives some or all babies born in an area some money, usually in the form of a savings bond or a cash deposit into a trust, that cannot be accessed until the child turns 18 years old. Several people and countries have proposed different versions of this idea to varying degrees of success and seriousness ranging from Hillary Clinton and Cory Booker to the British government and the country of Hungary. 

Connecticut’s baby bond program is revolutionary by virtue of being the first statewide program of its kind to exist. However,  is not as simple as the state depositing money into an account for a child when they are born. For starters, only babies born after July 1, 2021 that are covered by Medicaid or HUSKY are eligible to participate. Those who fall under this relatively narrow umbrella get $3,200 deposited into an interest-bearing trust that gets invested by the state treasurer’s office and cannot be accessed until the child is between the ages of 18 and 30.

In addition to those requirements, beneficiaries cannot access this money until they’ve completed a “financial education” class and they cannot spend that money on anything but “education, a down payment on a home in Connecticut, investment in an entrepreneurial pursuit or Connecticut business, or as a contribution toward retirement savings.” 

So, it’s far from a free-for-all or even really “free money” as there are many barriers to entry for the program and many strings attached to the money once it is deposited into each child’s account.  Though this should not be surprising, as from its very inception this program was not designed to be universal. Rather, it is one of many efforts to close Connecticut’s massive racial wealth gap, as the people who meet the criteria for eligibility into this program are disproportionately Black or Latinx. 

There is no doubt that this effort is coming from a place of kindness and genuine concern. There is also no denying that this is a step toward real progress and a literal material investment in the future of some of the most vulnerable populations in this state. It is still difficult to overlook the red tape and the many roadblocks that come with this program, but in the end, it is a step toward a better, more equitable future for the state of Connecticut. After all, Connecticut is a relatively conservative state and it’s a rare thing for us to be leading the pack. 

Hopefully, this program will pave the way for other states to implement even bolder programs. Things like a universal basic income or reparations for every person who has been impacted by America’s disgusting history of slavery and exploitation. Perhaps there will even be states who trust their people enough to spend their own money however they see fit and not require them to take classes to learn how. But then again, perhaps it’s best to not let perfect be the enemy of good with this groundbreaking new program. Overall, this is a step forward and we should take the very few wins we are handed whenever we get them.

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