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Vice President Gore Introduces New Inflation-Indexed Savings Bonds

FOR IMMEDIATE RELEASE

July 8, 1998

Bonds Honor Eight Distinguished Americans

Washington, DC -- Vice President Gore and Treasury Secretary Rubin introduced new inflation-indexed savings bonds that will protect Americans' savings against future inflation, and that also honor eight Americans for their significant contributions to America's past, present, and future.

“Now more than ever, Americans need to focus on saving for their children's college and their own retirement,” Vice President Gore said. “These bonds will make that much easier, and ensure that those savings will never be undercut by future inflation.”

The eight Americans featured on the bonds include:

$50 I-Bond: Helen Keller, a noted author and advocate for individuals with disabilities. Ms. Keller is also responsible for Braille becoming the standard for printed communication with the blind.

$75 I-Bond: Dr. Hector Garcia, a leading advocate for Mexican-American veterans' rights, an activist in the Latino civil rights movement, and the founder of the American GI forum.

$100 I-Bond: Dr. Martin Luther King, Jr., one of the nation's most prominent civil rights leaders. Dr. King was also a minister and Nobel Peace Prize recipient.

$200 I-Bond: Chief Joseph-Nez Perce Chief, one of the greatest Native American leaders.

$500 I-Bond: General George Marshall, U.S. Army Chief of Staff during World War II, Secretary of State and Defense, author of the Marshall plan, and Nobel Peace Prize recipient.

$1,000 I-Bond: Albert Einstein, a physicist and creator of the Theory of Relativity. Einstein was also a Nobel Prize recipient for Physics.

$5,000 I-Bond: Marian Anderson, a world-renowned vocalist and the first African American to sing with the Metropolitan Opera.

$10,000 I-Bond: Spark Matsunaga, a former U.S. Senator and Congressman and World War II hero.

“These I-Bonds will give Americans a way to save and be protected from inflation,” said Treasury Secretary Rubin, who joined Vice President Gore in announcing the new bonds and presenting each individual representing those honored a portrait as it appears on the Series I Inflation-Indexed Savings Bonds.

“The design of this new security gave us a rare opportunity to recognize these distinguished individuals whose talent and dedication helped our nation make great strides in knowledge, the arts, civil rights, and world peace,” Rubin added.

The Series I Inflation-Indexed Savings Bonds (I-Bonds) offer Americans protection from inflation, insuring investors a real rate of return over and above inflation. The earnings rate an investor makes on inflation-protected bonds is the combination of two rates: 1) a fixed rate of return announced by the Treasury Department that remains the same for the life of the bond; and 2) a rate of inflation that is adjusted every six months by the Bureau of Labor Statistics to reflect changes in the Consumer Price Index for all Urban Consumers (CPI-U).

I-Bonds may be attractive to investors for the following reasons: they protect investors from inflation; they are exempt from state and local income taxes and federal taxes can be deferred until the bond is redeemed or stops earning interest at 30 years; they increase in value monthly with interest compounded semiannually; and all or part of the interest earned may be tax-exempt if used for college tuition and fees at eligible post-secondary educational institutions, when income qualifications are met.

I-Bonds also protect investors from potential deflation. Even if deflation is greater than the fixed interest rate, the I-Bond's value will remain the same.

Six of the eight I-Bonds ($50, $75, $100, $500, $1000 and $5000) will go on sale September 1, 1998 and the rest will be available in May of 1999. The Bonds can be redeemed after six months and earn interest for 30 years. Investors redeeming Bonds before five years are assessed a three-month earnings penalty. Individuals can purchase up to $30,000 worth of I-Bonds each calendar year. I-Bonds are sold at face value.