(Photo: Bloomberg)
A group of businesses are asking Congress to consider legislation that helps workers build their emergency savings in a new letter from BPC Action and over 40 companies.
Their letter, which was addressed to House and Senate leaders Nancy Pelosi, Charles Schumer, Mitch McConnell, and Kevin McCarthy, outlines the unstable economic situation for many American workers while making a case for the potential benefits of bolstered emergency savings accounts. It points out that high inflation can make it hard for families to make ends meet, while decreasing the amount of money consumers can set aside for unexpected expenses. According to the letter, a quarter of American households have no emergency savings, and that number rises to 50% for households making less than $50,000 a year.
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Now, the letter suggests, it's time for Congress to take advantage of the lame duck period –
between mid-term elections and when the new representatives actually take office January 3 – and take nationwide action. For some representatives who failed to pursue or secure reelection, the lame duck period can represent their last chance to pass legislation.
"While employers and employees have signaled interest in offering and participating in workplace-based solutions, public policy is playing catch up," the letter says. "Changes in law are needed to maximize the effectiveness of these programs."
Related: Financial safety net: How employers can set up emergency relief funds for employees
Among the provisions the letter advocates for include removing old legal and regulatory barriers against emergency savings programs for workplaces and allowing employers to automatically enroll employees into short-term savings programs, even if they aren't offered retirement plans.
The letter was signed by 44 organizations, including SoFi, Gusto, the National Taxpayers Union, USAA, DailyPay, Consumer Federation of America and the U.S. Chamber of Commerce.
"We firmly believe emergency savings policy aligns with the goals of the U.S. retirement system and will help boost financial resiliency for American households," the letter says. "As you collaborate to secure a brighter, stronger economic future for the nation, we stand with you ready to help demonstrate your commitment to ensuring that every worker has the tools and resources they need to weather the next financial crisis, whether personal or national in scope. Together, let's do right by all Americans."
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