A resolution designating April 2006 as "Financial Literacy Month".

Mr. President, I rise today, as in years past, to submit a resolution to designate April as Financial Literacy Month. I thank my cosponsors, Senators Sarbanes, Cochran, Lautenberg, Kohl, Stabenow, Talent, Lincoln, Crapo, Johnson, Dodd, Martinez, Durbin, Inouye, DeMint, Baucus, Feinstein, Coleman, and Allen. I am pleased to once again work with colleagues on both sides of the aisle to promote financial and economic literacy for people of all ages all across America. This resolution highlights the need to combat financial and economic illiteracy in our homes, schools, workplaces, and communities,

and mobilize everyone to better educate themselves and others around them.

In my State of Hawaii, State Representative K. Mark Takai in a previous year sponsored legislation establishing April as Financial Literacy for Youth Month, as I had in a previous Senate resolution, and this year introduced HB 1920 to redesignate the name of the month as Financial Literacy Month to broaden the month's focus to people of all ages. Testimony from State and local officials and community leaders supporting the legislation included a statement from Ms. Kristine Castagnaro, Executive Director of the Hawai'i Council on Economic Education, who said, ``residents of all ages deserve to possess the skills necessary to make wise choices for their lives and communities.'' Mr. Brent Dillabaugh, Public Policy Director of the Hawai'i Alliance for Community Based Economic Development, said, ``Fostering basic financial and economic literacy is one of the most important aspects in achieving self sufficiency. As credit options become increasingly sophisticated and difficult to understand it is crucial that individuals have the capacity to make sound financial decisions.'' I support such State-level efforts in Hawaii and similar efforts across the country highlighting the need for us to focus on these important issues.

Education in personal finance and economics means empowerment, because it can provide people with the tools they need for sound decisionmaking. Unfortunately, many individuals do not understand even the basics of our complex economic system. Although much continues to be done to provide more Americans with an education in personal finance and economics, a number of troubling indicators show that many people are ill-equipped to negotiate life's financial choices.

For instance, scores went up for the first time on the Jump$tart Coalition's 2004 test of the financial literacy of high school seniors, but on average, students still failed the exam. States have responded so that now all recognize to some degree the need for economic or personal finance in their curriculum. However, according to the National Council on Economic Education, only 17 States require an economics course be offered in their high schools and only 15 require an economics course as a graduation requirement. Moreover, only 8 States require a course be offered with content in personal finance and only 7 States require students to take such a course. This picture must improve, as barriers to credit continue to decrease, and credit card holders become younger and younger. According to a recent national poll by Junior Achievement, 5 percent of teenagers 13-14 years of age reported having credit cards, and this percentage doubles to 10 percent for those 17 years of age, and doubles again to nearly 20 percent for those 18 and older. Early use of credit should be accompanied by early education in money management and the basics of economics.

On the other end of the spectrum, a tenth of our Nation's families are without an account at a mainstream financial institution. The most common reason people give for not having a checking account is that they do not write enough checks to make it worthwhile. Still, checking accounts are useful in a number of other ways and typically serve as the first formal relationship one will have with a mainstream financial institution. Opening an account at a mainstream financial institution is a critical step in the path to homeownership and entrepreneurship and allows individuals to benefit from the relatively low fees, savings instruments, and other wealth building opportunities offered by banks and credit unions.

Increased financial and economic literacy can help people navigate around the countless pitfalls found in the marketplace. Consumers with a variety of credit histories can easily find credit in many different forms. Lenders' aggressive marketing campaigns encourage families to take on substantial debt for indulgences and luxuries, which can be harmful if the families are already saddled with debt and are not saving toward an education or retirement nest egg. Taking out these loans is irrational, but abusive marketing efforts have resulted in unprecedented levels of borrowing.

Thus, although the availability of credit has grown dramatically, financial literacy has not yet increased adequately in response. Consequently, we are presented with a number of troubling statistics. Last year's personal savings rate was negative for the first time since 1933, at the end of the Great Depression. A negative savings rate means that, on average, people are spending more money than they make. Moreover, the household debt service ratio, which gives a sense of the proportion of disposable income people are using to pay off their debt, increased to record levels in 2005. These findings suggest a serious problem exacerbated by the fact that most workers have not calculated how much they need to save for retirement, even if they believe they are behind schedule in their retirement savings.

As policymakers, we need to focus on these issues year round. However, focusing on Financial Literacy Month in April means that we have a designated part of the year when we can reassess our efforts to highlight that worked and improve on those that have not. Once again, I thank my colleagues for their support of this resolution.

Mr. President, I rise today to join with my colleague, Senator Akaka, in support of his resolution designating April as Financial Literacy Month.

Financial literacy is an imperative for all Americans. From creating a family budget, to managing credit, to saving for retirement-- Americans need to understand financial principles more than ever before. However, research shows that Americans lack a fundamental understanding of personal savings, financial planning, and budgeting. According to the Jump$tart Coalition for Personal Financial Literacy, over 60 percent of our high school students could not pass a quiz with basic questions on savings and budgeting. In addition, an AARP survey found that less than half of those over age 45 could identify and define basic financial terms such as ``diversification'' or ``compound interest.''

Financial literacy is critical as more Americans take on more of the responsibility for managing their retirement savings. Pension plans are shifting from defined benefit plans, which guaranteed a certain benefit level for a lifetime, to defined contribution plans, which are based on the investment decisions of individual employees. Unfortunately, too many individuals do not have the tools to plan for retirement in a manner that will guarantee their long-term financial health. In fact, the Employee Benefit Research Institute found that only 60 percent of current workers are actively saving for their retirement, and only 42 percent of workers and their significant others have calculated what their financial needs will be in retirement.

The lack of financial literacy has serious ramifications, not only for individuals who fail to adequately budget and save, but for the national economy as well. The personal saving rate has recently turned negative, and personal saving is a component of national saving, which drives economic growth.

These trends are certainly troubling. In recent years, the work of Senator Akaka and others have focused attention on the threat posed by our Nation's high financial illiteracy rate. For example, Senator Akaka's Excellence in Economic Education Act promotes financial literacy in primary and secondary schools. Many groups have developed innovative programs to reach children of all ages on this topic, and increased access to formal economics classes has helped acquaint students with the financial services marketplace. In addition, public- private partnerships have helped adults increase their financial literacy and gain a better understanding of long-term financial planning tools.

It is my hope that this resolution will take another step to help increase awareness about the need to improve our Nation's financial literacy, and I am pleased to support it.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 410, which was submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table; and that any statements relating to the resolution be printed in the Record.

Mr. President, I ask unanimous consent that yesterday's action on S. Res. 410 be vitiated, that the resolution be agreed to, that the technical amendment to the preamble which is at the desk be agreed to, and that the preamble, as amended, be agreed to.