Well, today I'm transmitting to Congress an important initiative that was outlined last night in the State of the Union Address: the Savings and Economic Growth Act of 1990. And this important legislation will increase national savings, lower the cost of capital, create jobs, increase our international competitiveness, and improve our standard of living.
There are three elements to the act: family savings account, capital gains tax rate reduction, and then the homeownership initiative.
First, the family savings account will give Americans an important incentive to save for their futures. I believe Americans will save more if given this opportunity, and by doing so, they will generate new funds for investment that strengthen our economy.
Second, the permanent tax-rate reduction for long-term capital gains will lower the cost of capital and provide an incentive for long-term investment. And this will create jobs and make American business more competitive in the international arena.
And third, the homeownership initiative will allow individuals to withdraw without penalty up to ,000 from an IRA, from an individual retirement account, prior to retirement if the funds are used to purchase a first home.
And this legislative package will help millions of Americans invest in their children's education, buy a first home, and then set money aside for family emergencies. And this will also strengthen our economy, create jobs, and make America more competitive internationally.
I'm grateful to those of you here -- and up here -- who have worked so hard to craft this legislation, and I look forward to working closely with Congress towards its enactment.
And now I'll sign the transmittal that signs and sends the Savings and Economic Growth Act up to the Congress.
Note: The President spoke at 10:07 a.m. in the Roosevelt Room at the White House.