Four years ago, when she began putting a few dollars of her paycheck into savings every month, Toni Corinealdi was a single mother earning about $18,000 a year as an office manager for a small sheet metal company.

Alyssa Cwanger Toni Corinealdi records her checks and pays her bills in her office at her home in the Spring Hill section of the North Side as a result of what she learned from the Action Housing Family Savings Account Program. Click photo for larger image.

Saving was no mean achievement for the Spring Hill resident. With two daughters to support, her income hovered about 20 percent above the poverty level.

But Corinealdi, 37, was enticed by a significant incentive: The state Family Savings Account program, which was then offering to match every dollar she could put aside for savings up to $1,200 over two years. To get the match, she also had to participate in a financial literacy program.

Pennsylvania's Family Savings Account program is one of dozens of state initiatives to foster savings among lower income individuals and families. Generically known as Individual Development Accounts, or IDAs, they got their start in the wake of the sweeping 1996 federal welfare overhaul law that permitted states to use some welfare funding to help lower-income people build assets.

Nearly a decade later, with policymakers bemoaning the nation's meager personal savings rate, economic statistics suggesting a shrinking middle class and the White House promoting an "ownership society," IDAs and other asset-building programs for the poor are getting renewed attention.

Last month, Sens. Rick Santorum, R-Pa., and Joe Lieberman, D-Conn., introduced a $1.2 billion tax-credit bill that they say would provide for up to 900,000 IDAs over a 10-year period, up from estimates of 20,000 to 50,000 of Americans with them currently, by providing tax credits to offset financial institutions' costs of matching deposits. And last week, congressional hearings on Bush administration plans to partially privatize Social Security were broadened to look at other ways to boost retirement savings through incentives.

		What's required Under the state Family Savings Program, Pennsylvania families or individuals living on incomes of up to 200 percent of the federally defined poverty level qualify for as much as $2,000 in matching funds for savings they put aside over 13 months to two years. The income requirements stipulate that a single individual can earn up to $19,140 annually. For families of two, income can be up to $25,660 annually; for three, up to $32,180 annually; and for four, up to $38,700 annually. Larger families also can qualify at higher income levels. Anyone wishing to participate must enter financial literacy classes set up by any one of the agencies that administer the program. Savings must be deposited in financial institutions designated by the agencies overseeing the programs. Matching funds are granted only after achieving preapproved savings goals and only for preapproved asset investments. Eligible investments may vary between agencies but typically include payments toward home ownership, home repairs, post-secondary education, business start-ups, auto purchases or debt reduction, so long as the debt reduction is coupled with one of the other objectives of the program. To participate or obtain information, contact any of the following agencies: Action Housing, Garfield Jubilee Association, North Hills Community Outreach, the YWCA of Greater Pittsburgh, Armstrong County Community Action Agency, Butler County Home Ownership Corp., Community Action Southwest in Westmoreland County, Westmoreland Human Opportunities Inc. and Fayette Community Action Agency. -- Pamela Gaynor

The push to build savings among low- to moderate-income citizens comes as a recent experiment by the Retirement Security Project, primarily sponsored by the Pew Charitable Trusts, found that low- and middle-income clients of H&R Block in the St. Louis area significantly raised contributions to Individual Retirement Accounts when matching funds were provided. When there were no matching funds, only 3 percent of taxpayers still participated in the IRAs, even though H&R Block provided free assistance to set them up; with the match, 10 to 17 percent participated.

IDAs are designed to work the same way by providing individuals with an extra push to save. The Corporation for Enterprise Development, a Washington, D.C.-based nonprofit that manages a national network of IDA providers, says thousands of lower income people have used them to help buy homes, go to college or achieve other objectives that are hallmarks of the middle class.

Under the program, the federal Department of Health and Human Services provides matching money to state IDA programs that generally are administered by nonprofit community organizations and banks.

During the fiscal year that ends June 30, Pennsylvania allocated $827,000 in funds for Family Savings Accounts and received an equal amount of federal funds, said Kevin B. Ortiz, spokesman for the state Department of Community and Economic Development, the program's overseer in Pennsylvania.

"The Democrats love that we're giving away $2,000 [now the state's maximum match] and the Republicans love that we're making people work for it," said Ann Bailey, director of a Family Savings Account program run by Action Housing, one of four nonprofit agencies that administer the state program in Allegheny County.

The theory behind IDAs was that they would give people who generally have little, if any, savings a chance to build the kinds of assets that provide at least a handhold on middle-class security. It represented a shift away from decades of social policy designed to help poore r people almost exclusively through income subsidies.

IDA participants not only must enroll in financial literacy programs, they also must put their matching funds toward specified objectives, such as home ownership, post-secondary education for themselves or their children, starting a business or paying for home repairs.

Advocates for the poor maintain that providing such support also is a matter of fairness at a time when middle and higher income people get tax breaks for everything from owning homes to putting money in retirement plans, college funds and health savings accounts.

To the extent that IDAs have helped change the nation's dialogue about how best to help the working poor, they have been "hugely successful" spurring bipartisan sponsorship for another new bill that would provide savings accounts at birth for children, said Michael Sherraden, a researcher at Washington University's Center for Social Development in St. Louis. He is considered by many to be the intellectual father of the IDA concept.

The bill is similar but more limited to a concept former U.S. Treasury Secretary and Alcoa Chairman Paul O'Neill has promoted to eventually cut back, if not replace, Social Security. Such initiatives "make real the idea that poor people also need to accumulate something if they're going to get ahead," Sherraden said, adding that he did not see them as a substitute for such "social insurance" programs as Social Security.

Sherraden acknowledged that there was not enough data to determine how successful IDAs have been in elevating recipients from poverty. But he said he had no doubt that "a lot of people who have IDAs have done better."

Corinealdi, the single mother who saved to pay off debts and purchase a home, said she's one of them.

Alyssa Cwanger, Post-Gazette Toni Corinealdi, left, claps for her daughter, Teanna, 11, as she practices on the keyboard that Toni bought for her with money she saved up as a result of a savings plan. Click photo for larger image.

When she first heard about the Family Savings Accounts offered through Action Housing, she said she'd racked up about $5,000 in credit card debt, was making only the minimum monthly payment and "wasn't getting anywhere."

A former welfare recipient who made the transition to work after going to the Western School of Health and Business, Corinealdi said getting her first real job and qualifying for a credit card made her think she could "splurge" and "catch up on the things I missed out on."

"I did not use it wisely," she said. "When they gave me credit, I ordered things out of catalogs," bought clothes and ate out too often.

As a result, she said she found herself living from paycheck to paycheck and unable to qualify for a home mortgage. Corinealdi was skeptical that she could put much aside, but signed up anyway for the Family Savings Account program.

As much as the prospect of state matching money, the financial education classes she was required to take turned the tide for her, she said.

"I learned a lot -- not just to save, but how to budget my money," Corinealdi said. "I just sat down, took a look at everything, how I was spending my money, and we made some changes," cutting back mainly on cable television services and eating out.

Since completing the program and winning the grant, Corinealdi, who now works as a secretary in the communications department at the Pittsburgh Board of Public Education, said she still used the disciplines she was taught, looking over expenses to see if anything was getting out of hand.

Recently, she noticed she was paying both for Verizon's DSL Internet connection and for AOL, which she no longer needed after signing up for the broadband service. Thanks to the program, "I'm still saving," she said.