- The Washington Times - Friday, April 19, 2002

Two single mothers who once struggled to get ahead came to Capitol Hill yesterday to promote a little-known provision in the faith-based charities bill before the Senate that they say would help others like them go to college, buy homes and start businesses.

Stacie Mitchell, a single mom from Des Moines, Iowa, and Mary Cefarro, a single mother from Helena, Mont., both said their lives were greatly improved because they started an individual development account.

IDAs are savings accounts for low-income individuals, who receive matching funds from nonprofits or community groups, including faith-based organizations.

Participants, who must take financial-management classes, can use the funds to further their education, purchase a first home or start a business.

There are currently about 250 IDA programs nationwide, some of which have been administered on a limited basis through federal agencies.

The Senate faith-based bill sponsored by Sens. Rick Santorum, Pennsylvania Republican, and Joseph I. Lieberman, Connecticut Democrat, expands the idea to a national program administered by the Treasury Department. It would allow 900,000 more low-income individuals to start IDAs.

Miss Mitchell who has two young sons got involved in an IDA program in 2000, after she could not find a job that paid enough. After saving $4,000 and receiving another $4,000 through the match, she was able to open a small business, Special Occasions, which sells clothing, jewelry and cell phones.

Now, two years later, she is saving for her boys' college educations and hoping to perhaps turn the business over to them one day. "I'm looking at it like a family business," she said.

Miss Cefarro, the single mother of four from Montana, is using her IDA account to finish her college degree in nursing.

Ray Boshara, policy director for the Corporation for Enterprise Development, said IDAs are "really the next step beyond welfare reform," allowing low-income people to invest financially in their families and communities.

Under the Santorum-Lieberman bill which is expected to be considered by the Senate Finance Committee next month the federal government would reimburse participating financial institutions for the account's cost through an annual tax credit of up to $500 per individual account holder.

Single people earning less than $20,000 annually would qualify to open an account, as would the head of a household who makes less than $30,000 and couples who make less than $40,000.

The president's 2003 budget proposal sets aside $1.7 billion for this effort. Federal Reserve Board Chairman Alan Greenspan indicated support for IDAs in a speech he made in January.

Michael Siegeo, spokesman for the Finance Committee, headed by Sen. Max Baucus, Montana Democrat, said it is premature to comment about specific provisions, such as IDAs. He said Mr. Baucus is interested in the bill and plans to hold a markup before the Memorial Day recess.

IDAs are only one aspect of the Santorum-Lieberman, which the White House helped craft. The bill also would offer a series of tax incentives to encourage charitable giving and create a federal fund to provide technical assistance to small faith-based and community groups.

The House passed a faith-based charities bill last year that contained similar provisions. But it ran into controversy over the "charitable choice" component, which would allow religious organizations to compete for a wide array of government grants.

The Santorum-Lieberman bill does not contain "charitable choice."

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