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 In
the past year, revenues from America’s leading credit card companies
have climbed significantly, despite recent reports of economic
uncertainty. One of those card companies saw their revenue jump 22
percent last year as the number of consumer payment transactions
increased. Just this week, the same company announced its intention to
move forward with an initial public offering of roughly half of its
shares, raising potentially $18.8 billion for the company. In the wake
of unsettling news, these reports on soaring profits for credit card
companies are a frightening indicator of our country’s increased use of
credit – America has become a pay-over-time, pay-monthly society.
In the past ten years, the individual household savings rate in America
has fallen drastically to the lowest it has been since the Great
Depression. In 2005,
the household savings rate fell below zero and, for the first time in
recorded American history, has consistently
declined since that point. This means that Americans have not only spent
their after-tax income, but they have increased the amount that they
borrow. When compared with other developed countries, we have by far the
lowest household savings rate – the U.K’s comes in at 4.9%, Japan at
3.1%, Germany at 10.5%, and Italy at a staggering 11.9% in 2006.
Our national and personal financial situations are uncertain: we are
experiencing subprime mortage difficulties, making patchwork attempts to
create a temporary economic boost, and seeing college students graduate
with more and more credit card debt. Americans have traded their
personal savings to finance big purchase items, and as a result, monthly
payments have prohibited Americans from being able to appropriately
respond to emergencies and save for retirement. If you watch any car ad,
you will quickly realize the mindset of a monthly payment economy we
have to come to accept as normal. Want that luxury car? As long as you
can make the monthly payment, it’s no problem. In fact, finance it for
seven years, and the monthly payment will become even lower. Little
thought seems to be given to how much it will end up costing you in the
long run.
Almost as soon as they are accepted to college, students are bombarded
by credit card companies offering them applications for a line of
credit. According to a study by NellieMae, the average college student
carries about $2,200 in credit card debt. Seventy-six percent of
undergraduate students begin their school year with credit cards, and
only 21% report that they pay off their credit card balance each month. College
students are graduating with thousands in credit card debt, even before
they are earning a steady income, making it nearly impossible to
contribute to a savings or retirement account for years after they are
out of school.
The amount of money individual households are saving has important
national economic consequences. Individual savings is important to the
accumulation of sufficient wealth to maintain an acceptable standard of
living after retirement. According to a study by the non-partisan
Congressional Research Service, an increase in domestic savings could
have a positive impact on our economy. Individual household savings when
combined with businesses’ retention of their profits for investments,
and the government’s savings or non-savings, result in “national
savings.” Our national savings has important consequences for our
economic growth as a country, our future standards of living, and the
balance of trade. When we increase our domestic savings, we will see an
increase in U.S. investments and a reduction in U.S. dependence on
foreign resources to finance domestic investment. The impact of this
would mean that more goods and services would be produced within our
nation’s borders, leaving a larger share of income for Americans and
creating long-term economic benefits.
Raising our individual household savings rate will take a combined
effort among individuals and policymakers. We each have a responsibility
in determining the final figure. We need to reform spending in
Washington and reduce the federal deficit so that the government is
modeling appropriate spending. Congress needs to be considering
significant tax reform to reduce the tax burden on our families to make
saving an achievable goal. We need to consider providing more incentives
for savings, such as what has been done with IRA’s and thrift savings plans.
We need to make corporate tax cuts so that we are encouraging more
investment, which will generate income at home and make us more
competitive globally.
On a household level, individuals must begin making responsible
decisions on how much income to save and how much to spend. This starts
with educating our younger generation and our college students on
financial literacy. Many young people today do not understand basic
financial principles like balancing a checkbook, saving for a rainy day,
or compound interest. Individual household savings and economic growth
are uniquely connected, and it is when we begin to consider our personal
financial decisions as a key player in our national economy that we will
begin to see long-term economic growth.
This week we recognize America Saves Week. In an effort to encourage
individual savings, the America Saves Week organization offers helpful
resources for organizations and individuals who are looking to test
their savings knowledge, to take action on saving more effectively, or
to find information on various financial situations from dealing with
credit card debt, to planning for
retirement, to preparing for emergencies. You can find these
resources and more online at
www.americasavesweek.org.
Visiting Our Nation's Capital
 It
is that time, once again, when families begin planning their spring
break and summer vacations. As you begin to brainstorm a list of places
that interest you, I recommend that you consider visiting our nation’s
capital.
Washington, D.C. is one of the most beautiful and interesting cities
in the world, and I encourage you to take advantage of its rich history
and endless opportunities. If you plan to visit this summer, you should
begin reserving the most popular tours today, including the United
States Capitol Building and the White House.
My staff is pleased to offer staff-led tours of the
United States Capitol for groups of 15 or fewer constituents. These
tours are available from 9:30 - 3:30, Monday through Friday. As we have
a small staff and these tours are very popular, please book tours at
least two weeks in advance by filling out a
tour request form. Additionally, passes to the House and Senate
galleries are available by stopping by my office in
307
Cannon House Office Building.
We are also pleased to help set up tours of the
White House for groups of 10 or more. Because of high demand, White
House tours must be booked at least two months in advance and up to six
months in advance. Tours of the White House are scheduled on a first
come basis in the order in which the request was received. In order to
increase your chances of receiving a tour, I recommend making your
requests as early as possible. I also recommend making yourself
available on as many days as possible; the greater your flexibility, the
greater your chance of participating in a tour.
As you plan your trip to the nation's capital, my staff is here to help.
Feel free to contact the Tour Coordinator in our Washington, D.C. office
for information on touring and
visiting Washington, D.C. If you are interested in requesting a tour
of the Capitol or of the White House through our office, please fill out
a
tour request form and return it to the Tour Coordinator via fax
(202-226-1170) or email
forbes.tours@mail.house.gov.
With hundreds of educational and exciting places to visit and things to
do, Washington, D.C. is a great destination for your vacation. Below you
will find links to some of the more interesting and popular attractions,
things to do, and events to experience in the DC Metro Area.
 Monuments
and Memorials
On Capitol Hill
Historic Homes and Areas
Museums
and Galleries
The Smithsonian Institute
Events and Festivals
Theaters and Venues
D.C. Sporting Events |
