The Skills Investment Act of 2019 would expand Coverdell Education Savings Accounts to cover skills training, career-related learning, and professional development
WASHINGTON- Today, 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 2019 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, apprenticeships, and professional development. Congressmen Derek Kilmer (D-WA) and Glenn Thompson (R-PA) also introduced companion legislation in the House of Representatives today along with Representatives Scott Peters (D-CA), Brian Fitzpatrick (R-PA), Kathleen Rice (D-NY), Bill Posey (R-FL), Elaine Luria (D-VA) and Ann McLane Kuster (D-NH).
“The American workforce is changing, and there isn’t one path to success,” Klobuchar said. “Every person in this country deserves a clear path to a good job, and this bill helps people save for and attain the right training to begin and grow in their careers. For some this means saving to enroll in college—but for others that means skills training, apprenticeships, and professional development. No matter what path a student or worker takes, they should have the tools to save for the education necessary to succeed in their careers.”
“Our economy is changing fast but too many politicians give empty promises and stale nostalgia,” Sasse said. “We need to rebuild our job retraining programs if we’re going to help our friends and neighbors compete in the new economy. Washington is late to this debate and the Skills Investment Act is a good place to start rethinking how we do education and job training.”
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.
"Economic change can be enormously disruptive. We’ve seen entirely new industries come -- and go,” said Representative Derek Kilmer. “We’ve seen technology fundamentally change some professions. It’s important that American workers be empowered to navigate economic change rather than to be victims of it. Under the Skills Investment Act, American workers can save money to invest in themselves to do just that – helping them afford to enroll in apprenticeships, college classes, or retraining programs. This can be a powerful tool to help workers learn new skills, land new jobs, and earn bigger paychecks.”
“Expanding access to skills-based educational opportunities and professional development will provide incentives for workers of all ages to invest in their futures,” Representative Thompson said. “With more than 7 million job openings nationally, we must ensure that job seekers are attaining the skills necessary to compete for in-demand positions. 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 are uncertain 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, Senior 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.