Message to the Congress Transmitting Proposed Savings and Economic Growth Legislation

To the Congress of the United States:

I am pleased to submit for your consideration and passage the "Savings and Economic Growth Act of 1990." This legislative proposal would enact a permanent reduction in the capital gains tax rate, establish a new family savings program, and permit penalty-free Individual Retirement Account (IRA) withdrawals for first-time home buyers.

This proposal would encourage savings, investment, and economic efficiency, thereby creating jobs and providing other economic benefits to all citizens.

A permanent tax rate reduction for capital gains will lower the cost of capital and provide an incentive for long-term investment in the American economy that will create jobs and make American business more competitive in the international economy.

A new Family Savings Account will give most American families an opportunity to save through a simple and understandable tax-exempt savings incentive program. The resulting savings boost will also strengthen our economy and create jobs and opportunity for all Americans.

Permitting Americans to withdraw funds from their IRAs prior to retirement without penalty for the purchase of their first home will assist individuals in saving for that first home, while providing additional stimulus to the construction of affordable housing in our country.

I look forward to working with the Congress on these important matters.

George Bush

The White House,

February 1, 1990.