Image Credit: Wikimedia
Washington, D.C.— President Donald Trump unveiled his new “Trump Accounts” initiative on June 9, promising every American newborn from January 1, 2025, to December 31, 2028, would receive a $1,000 tax-deferred investment account—backed by several major corporations including Dell, Goldman Sachs, Uber, and Robinhood.
Marketed as a pro-family, wealth-building effort, the program rests at the heart of the broader “One Big Beautiful Bill” now facing debate in Congress.
Key Facts:
- The program guarantees a $1,000 government seed for each child born between 2025–2028; families may contribute up to $5,000 annually tax-free.
- With an estimated 7% market return, the seed could grow to roughly $574,000 over 60 years or $3,570 by age 18.
- Costing about $3–3.6 billion per year, the proposal cleared the House but faces Senate skepticism and criticism over simultaneous welfare cuts.
Trump’s rollout began with a White House roundtable on June 9 featuring CEOs who pledged billions in private matching contributions.
Dell CEO Michael Dell announced his company would match the federal $1,000 for employees’ children, while Goldman Sachs’ David Solomon highlighted how early investments “bind future generations to the benefits” of market participation.
Despite fervent business support, critics argue the flat $1,000 benefit is insufficient and regressive—favoring wealthier families more capable of boosting contributions.
Op‑ed authors Darrick Hamilton and Rep. Ayanna Pressley urge a progressive “baby bonds” model targeting low-income children instead.
Furthermore, a Congressional Budget Office report warns the plan could add $2.4 trillion to the national debt and cut benefits for nearly 11 million Americans by 2034.
“Early childhood investments have far-reaching benefits, and Goldman Sachs is proud to support his initiative,” said Solomon during the roundtable—a direct reflection of the private-sector drive behind the proposal.
Politically, the initiative aims to frame the broader budget package as family-friendly and fiscally innovative.
But due to mounting concerns over its regressive structure, high cost, and simultaneous welfare cutbacks, the future of “Trump Accounts” remains uncertain in the Senate, where negotiations continue ahead of a planned July 4 deadline.
Do You Know?
Similar programs exist globally: the UK operated “Child Trust Funds” (2002–2011) and Singapore runs a “Baby Bonus Scheme,” both aimed at giving newborns a financial head-start.
Key Terms
Tax-deferred investment account: A savings account where investment growth isn’t taxed until funds are withdrawn, allowing earnings to compound.
Baby bonds: Government-funded savings accounts established at birth, with progressive contributions based on family income, designed to close wealth gaps.
One Big Beautiful Bill: Trump’s sweeping federal budget proposal, combining tax cuts, spending priorities, and the new “Trump Accounts” initiative.