A 21st Century G.I. Bill
America has a lot of work to do to keep our country strong at home and abroad.
In the short term, we must deal with the mortgage crisis and get our economy back on track.
In the longer term, we must be strong in the world. We must defeat terrorism, counter the jihadist threat and rebuild both our military and our standing in the world community, even as we extricate our country responsibly from the war in Iraq.
We must also be strong at home. We must create an opportunity society that offers Americans who go to work every day and play by the rules a chance to get ahead in the global economy. That means we must get our fiscal house in order, radically overhaul public schools so they produce a 21st century workforce, and deal with middle class anxieties about health care, retirement and access to college. And, it means that we must come to grips honestly and responsibly with the burdens that the baby boom retirement places on Medicare and Social Security.
We need to reduce our dependence on oil with a comprehensive energy policy. That’s a national security, economic and environmental necessity. We can’t continue to fund both sides of the war on terror and ignore climate change. And we can create unbounding economic opportunity by making America the leader in the development and application of green technology.
Finally, we need to repair our fraying social fabric. That means we must resolve as a nation to leave no one behind - by making it national policy that every American who works full time, year around, to support a family will not be poor. It also means bringing our people together by ending the hyper-polarized politics, strengthening the institutions of our democracy, and asking all Americans to give something back to the commonwealth.
Those are awesome challenges that will face our next president. Two things are certain. First, there are no silver bullets. To meet these challenges will require a series of bold and innovative solutions that can win support on both sides of the political aisle. And, second, we’ll never really make the progress we must unless all Americans buy and pitch in. We’re all in this together.
Every great national effort needs a cornerstone idea. The building of the canals, railroads, the land grant college system, the interstate highway system, and the G. I. Bill were all such cornerstone ideas at critical junctures in our history. Each in their time helped build America, grow its economy, strengthen its society and provide unprecedented opportunities for its citizens to prosper.
We believe a 21st Century G.I. Bill can be such a cornerstone idea for the next generation and generations to come. This new G.I. Bill would incorporate key elements of the first G.I. Bill, the Montgomery G.I. Bill, and the Americorps program.
Here’s how it would work. At birth, the federal government would deposit $5,000 - a so-called “Baby Bond” - in the name of every child born in a 529-type college education fund. Families would be encouraged to supplement it with additional payments to the fund when they could. Through the miracle of compound interest, that fund would be worth nearly $17,000 by the time the child was ready for college, even if the parents never added a dime. In the event that the family were to contribute just $100 a month to that same account, it would be worth more than $60,000 18 years later. The money could be tapped anytime between 18 and 25 and used to pay for college, start a business, or buy a first home. Every child would have that opportunity.
But under this new G.I. Bill opportunity would come responsibility. To get the government’s contribution with interest, a child would have to commit to one year of civilian or military service. If a child didn’t serve, he or she could, of course, withdraw any funds his parents contributed. But the federal contribution would remain in the treasury.
That’s all there is to it: a basic bargain between every child born in America and their government. Government will invest in your future, but to redeem that investment you have to serve your country.
That’s a bold idea, but it’s hardly radical. It’s been endorsed by Time Magazine and leading practitioners of national service like Alan Khazei and Mike Brown, founders of City Year, and Michelle Nunn, founder of Hands Across America.
And, it is rooted in history. After President Franklin Roosevelt signed the original G.I. Bill on June 22, 1944, nearly half of the more than 16 million Americans in the Armed Forces used the new program to improve their education and 11 million bought homes under its provisions. It’s no exaggeration to say that the G.I. Bill was instrumental in building our middle class and our society as we know it today.
A 21st Century G.I. Bill could have the same dramatic impact on America today.
It will help rebuild our military and strengthen America in the world. The service requirement of the program would swell the ranks of the military. Without lessening our commitment to an all-volunteer military, the leadership and talents of a greater range of American citizens serving in the military would strengthen the ranks. But the military, of course, is not the only option toward fulfilling the service requirement. While some will choose the Armed Services, others will join the Peace Corps, the Red Cross, or other international aid organizations. That, in turn, will improve the country’s ability to project soft power, putting more Americans at work building roads, running clinics, and teaching children.
A 21st Century G.I. Bill could help rebuild the middle class and dramatically increase the chances for ordinary Americans to prosper in the global economy. Our success in this future depends on our ability to produce college graduates, and higher education is the key to expanding the middle class. Over the course of a lifetime, an undergraduate degree will be worth nearly $500,000 more in earnings than a high school diploma. Today, according to the College Board, it costs an average of $13,589 each year to attend a four-year public university. By 2025, the price will triple to more than $36,000 a year. Rising costs mean more debts. Providing every child a personal savings account from birth would go a long way toward offsetting those costs and giving kids a debt-free start after college.
And, it will help repair our country’s fraying and fragile social fabric. Asking young people to make this commitment to service in exchange for opportunity will redefine civic obligation in America and spread the burdens of citizenship more equitably. Mobilizing millions of volunteers each year will allow us to tackle many of the nation’s most pressing social problems, be they in areas of health, the environment, education or housing and homelessness.
Critics of a 21st Century G.I. Bill will undoubtedly say it’s too expensive, the same charge they used against the G.I. Bill seven decades ago. But history has shown that the G.I. Bill has generated $7 in economic benefit for every $1 invested and it provided an education for three presidents of the United States, three Supreme Court Justices, and 14 winners of the Nobel Prize.
Moreover, the new version’s design as a defined contribution rather than a defined benefit system will keep the long-term cost of the program lower. By investing a set amount for each child at birth - the baby bond - it allows compound interest to work for us since that investment will be worth much more than the original $5,000 when it is withdrawn.
A new 21st Century G.I. Bill will not be a panacea for all of our nation’s ills. But it can be a cornerstone idea for pulling our nation together to tackle its biggest challenges and for restoring the basic bargain of opportunity and responsibility that has made America the strongest and most prosperous country on earth.