The Skills Investment Act of 2018 would expand Coverdell Education Savings Accounts to cover skills training, career-related learning, and professional development
WASHINGTON- U.S. Senators Amy Klobuchar (D-MN) and Ben Sasse (R-NE) introduced bipartisan legislation that would help equip American workers with the skills and training they need to compete in today’s economy. The Skills Investment Act of 2018 would expand Coverdell Education Savings Accounts—tax advantaged savings accounts for educational expenses—so American workers could use the accounts to pay for skills training, career-related learning, and professional development. Congressmen Derek Kilmer (D-WA) and Glenn Thompson (R-PA) also today introduced companion legislation in the House of Representatives along with Congressmen Scott Peters (D-CA) and Lou Barletta (R-PA).
“The American workforce is changing, and people need the ability to save for and attain the right training to begin and grow in their careers,” Klobuchar said. “For some this means saving to enroll in college—but for others that means skills training, career-related learning, and professional development. No matter what path a student or worker takes, they should have the ability to save to get the education necessary for 21st century jobs.”
“Washington doesn’t focus enough on the future of work because too many politicians are stuck in the past,” Sasse said. “We’re entering an era of massive economic disruption and job change – Americans need to become lifelong learners. The Skills Investment Act will help American workers adapt to the reality of the new workforce by helping them complete new skills development and retraining programs. We need to get prepared for what’s coming – this is a good place to start.”
The Skills Investment Act of 2018 will allow workers to use tax-advantaged savings accounts to pay for skills training programs throughout an account holder’s lifetime. The bill would eliminate the age-based contribution limit on Coverdell ESAs and expand the scope of allowable distributions to cover a broad array of career and technical education services. These savings accounts would now be eligible for pretax contributions and mid-career workers would be allowed to contribute up to $4,000 tax free each year, with a maximum contribution limit of $10,000. Employers would receive a 25% tax credit for contributions to a worker’s account.
“Our economy is changing fast and the Skills Investment Act will help workers change with it,” Kilmer said. “American workers can use money from lifelong learning accounts to learn the skills needed to land new jobs, earn bigger paychecks and help our country out-compete the rest of the world. And employers can use the accounts to attract the best workers. This is just the start of what Congress can do to help America compete and win in the 21st Century economy.”
“I fully support expanding access to skills-based educational opportunities and professional development, and this bill provides incentives for workers of all ages to invest in their futures,” Thompson said. “With more than 6 million job openings, we must ensure that job seekers are learning the skills necessary to compete for in-demand jobs. As Co-Chair of the bipartisan House Career & Technical Education Caucus, I am proud to co-lead this bill with Rep. Kilmer and I thank him for his dedication to this issue.”
“As the U.S. economy continues to grow, federal policies that aim to prepare workers for emerging job openings and help businesses maintain their competitive edge are more important than ever. National Skills Coalition—a multi-stakeholder organization focused on supporting a wide range of workers and industries—applauds Senators Amy Klobuchar and Ben Sasse as well as Representatives Derek Kilmer and Glenn Thompson for introducing the Skills Investment Act of 2018, a straightforward, bipartisan measure that will make career-related learning more accessible,” said Katie Brown, Senior Federal Policy Analyst at the National Skills Coalition.
“Workers all over the country have an underlying worry about their economic future in the digital age. To help them and their children, we need new and modern policies that drastically increase the opportunity for workers to get 21st-century skills and high-quality credentials. Lifelong learning accounts are the exact type of forward-thinking tool that can transform the ability for people to earn a good life throughout their career. We applaud Sen. Amy Klobuchar and Rep. Derek Kilmer for their approach to this critical idea and consistent leadership on helping more Americans earn in the decades ahead,” said Gabe Horwitz, Vice President for the Economic Program at Third Way.
Klobuchar has long supported efforts to help workers succeed in an increasingly specialized workforce while making the country’s economy more competitive. In 2017, she and Senator Susan Collins (R-ME) introduced the bipartisan American Apprenticeship Act, which would help create and expand pre-apprenticeship and registered apprenticeship programs. She is also a cosponsor of the bipartisan Apprenticeships and Jobs Training Act of 2017 and the Leveraging and Energizing America’s Apprenticeship Programs (LEAP) Act, which would provide tax credits to employers to hire registered apprentices and help increase the number of registered apprenticeships in the U.S.