Governor, Treasurer Celebrate a Disaster with ‘Baby Bonds’

Chris Powell

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Governor Lamont and state Treasurer Erick Russell this week invited Connecticut to celebrate a disaster. They announced with rejoicing that almost 8,000 children born in Connecticut since last July 1 have qualified automatically for state government’s “baby bonds” program by virtue of the coverage extended to their parents by Medicaid, government medical insurance for the poor.

Another 15,000 children are expected to be born into Medicaid — that is, born into poverty — in Connecticut this year, and 15,000 or more every year after that in perpetuity. Wonderful!

Most parents whose households get Medicaid were unprepared to support children in the first place. Such households are usually headed by unmarried women whose children have little if any commitment from fathers. With its “baby bonds” program at least state government acknowledges that such households are where poverty begins.

So now Connecticut is investing $3,200 on behalf of each new Medicaid baby in the expectation that the bond’s value will increase to $11,000 or more by the time the child reaches age 18, whereupon the beneficiary will be able to liquidate the bond for cash for higher education, purchase of a home, or investment in a business or retirement plan.

“In just six months the first-in-the-nation Connecticut baby bonds program has put more than 7,000 working families on a pathway to the middle class and is transforming the future of our state,” the governor said. “This gives our young people startup capital for their lives and ultimately will help break the cycle of intergenerational poverty for thousands of families.”

The governor’s forecast makes some happy assumptions: that escaping poverty is mainly about access to cash and that the beneficiaries of baby bonds will reach 18 well-parented, well-educated, skilled and employable enough to make their own way in the world, and not demoralized from neglect at home and in trouble with the law.

The Department of Children and Families, the courts, and the Correction Department know better than such assumptions about kids born into Medicaid.

The baby bonds program also assumes that its beneficiaries will reach 18 knowing how to manage money. Since even the program’s advocates recognized the shakiness of that assumption, baby bond recipients are to be required to pass a test of financial literacy, at least if the people running the program 18 years hence remember to devise one.

But recipients of baby bond cash will not be required to have mastered basic courses in high school, nor even to have graduated from high school. Indeed, linking baby bond cash with educational success would have made the case for the program much stronger. But such a link would have impugned all public primary education in Connecticut, whose main policy is just social promotion.

Treasurer Russell acknowledged that baby bonds are not a “silver bullet” and that breaking the cycle of poverty will require far more action. “How we support those kids along the way will go a long way in determining how prepared they are to seize this opportunity,” Russell said. So he has organized a study committee about that.

Such an inquiry should have long preceded baby bonds. 

For starters it should have asked how children are diverted from poverty by a welfare system that rewards childbearing outside marriage, depriving them of fathers, and by schools that advance them without requiring them to learn anything.

What most improves a child’s chances is well documented: a stable family with two devoted parents who know the necessity of education and work and who set the right examples. The children of such families long have avoided poverty without baby bonds. 

As the governor notes, young people going out into the world need some capital to get started with. But the better part of that capital is not the money thrown at problems by elected officials too lazy or scared to examine them. The better part of that capital is intangible: what is put into the minds and character of children as they grow up.

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Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net