Democrats have had a decent week. Senators Chuck Schumer and Joe Manchin announced that they have come to an agreement on a $700 billion bill that will lower energy and prescription drug prices, reduce the deficit, address climate change, and deliver the party and its embattled president a much needed major legislative win. As if this weren't enough, both the Senate and the House of Representatives passed a bill that will produce more computer chips domestically to allow the U.S. to compete with China, which is headed to President Biden's desk. The Democrats also secured some encouraging midterm polling numbers, which suggests that they could expand their Senate majority after the midterms and perhaps even keep their current House majority.
The question is, will these victories be enough to stop a recent trend of voters of color, long a mainstay of the Democrats, defecting to the Republicans?
Modern day Republicans have done nothing to actually win over Black and Latino voters, but some African Americans and Latinos are frustrated with what they view as Democrats' broken promises and failures to address persistent disparities that plague our communities in areas like education, housing, and criminal justice.
Perhaps none of those disparities has a greater impact on the quality of life of Black and brown people than wealth inequality. Decades of slavery, employment and education discrimination, redlining, and incarceration have left the average Black family with one tenth of the wealth of the average white family. White families also have eight times as much wealth as Latino families.
Some may argue that there is equal opportunity to build wealth for African Americans and other people of color today, and yet, the primary means of transferring wealth is inheritance, and according to the Urban Institute, Black and Latino families are "five times less likely to receive an inheritance or large gifts than white families."
Fortunately, there is a policy that President Biden could embrace that would help reduce the racial wealth gap and can even help the Democrats garner support from working class white voters. That policy is baby bonds.
Professors Darrick Hamilton of The New School and William Darity of Duke University were the first to propose the idea of giving each American child a $1,000 savings account at birth. Depending on income, the child could get an additional $2,000 a year, with the poorest children receiving the largest supplements. When the children turn 18, they would be able to use the funds for education costs, starting a business, or buying a home.
The idea has gotten some traction. In 2021, Senator Cory Booker (D-NJ) and Rep. Ayanna Pressly (D-MA) introduced baby bonds as part of the American Opportunity Accounts Act. The legislation has been endorsed by economic experts at Morningstar as a legitimate and viable way to address the racial wealth gap.
Morningstar estimates that "the median Black family has 96 percent less wealth per minor child than white families." By implementing baby bonds, that gap shrinks by about 40 percent per child. It's important to point out that according to the Morningstar projection, white wealth would also increase with baby bonds, driven largely by the nest egg provided for working class children.
There are many African Americans who believe the best way to address the racial wealth gap are reparations for the descendants of American slavery. According to a UMass poll, most Americans oppose reparations, including a whooping 90 percent of Republicans. While reparations are undeniably justifiable, the estimated $14 trillion price tag and fierce political opposition make its implementation unlikely in the short term.
President Biden may not have the political capital to even get HR 40 passed, a bill dedicated to the study of reparations, let alone an actual reparations bill. But that's where baby bonds come into it: They are not racially exclusive, yet they will benefit Black families the most, since they are overrepresented among the economically disadvantaged.
Democrats need to recapture the imagination of the American people as the pro-family and pro-working class party. Supporting the American Opportunity Accounts Act will help support families and be a permanent means of helping students escape debt.
Should they get behind it, the Democrats could tout baby bonds for generations as proof that they support American families and stave off a damaging political realignment by securing Black and Latino votes.
Dr. Jason Nichols is an award winning senior lecturer in the African American Studies Department at the University of Maryland College Park and was the longtime editor-in-chief of Words Beats & Life: The Global Journal of Hip-Hop Culture. He cohosts the "Vince and Jason Save the Nation" podcast.
The views expressed in this article are the writer's own.
