Trump promises to open investment accounts for every newborn American: the government will put $1000 there

Trump announced the creation of $1000 government investment accounts for American newborns. These tax-deferred accounts will track the stock market, writes The Guardian.

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On June 9, Donald Trump unveiled a federal program that would provide $1000 government-backed investment accounts for American newborns. The initiative has received support from top business leaders who plan to pump billions of dollars into the project as part of a program tied to a “big, beautiful bill.”

At a White House meeting with more than a dozen CEOs, including representatives from Uber, Goldman Sachs and Dell Technologies, the White House chief unveiled details of the “Trump accounts” — tax-deferred investment accounts for children born between 2025 and 2029. The returns on those accounts would be tied to the stock market.

"For every American citizen born between December 31, 2024 and January 1, 2029, the federal government will make a one-time deposit of $1000 into a tax-deferred account that will track the overall performance of the stock market," the president said.

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The accounts would be administered by the children's guardians, with additional private contributions of up to $5000 per year allowed. Trump called the initiative "a program to support families that will help millions of Americans use the strength of our economy to secure the future of the next generation."

CEOs of major companies, including Michael Dell, Uber's Dar Khosrowshahi, Goldman Sachs' David Solomon, and Robinhood's Vladimir Tenev, have pledged billions of dollars to accounts for employees' children. Trump praised the businessmen, calling them "the best minds in business today" who are "willing to put millions of dollars into Trump accounts."

House Speaker Mike Johnson, who attended the meeting, endorsed the program: “This is a bold and transformative policy that will give every American child a financial advantage from day one. Republicans are proud to be the party that has always stood for families, prosperity, and opportunity.”

The program has already passed the House as part of a massive budget, but it faces stiffer Republican resistance in the Senate over the contents of the entire package. The bills cannot be passed on their own and are entirely dependent on the passage of what Trump calls a “big, beautiful bill” that he calls “one of the most important pieces of legislation in the history of our country.” The president says the bill is “fully funded by targeted reforms,” including changes to Social Security and a proposed tax on cash transfers.

Still, the Congressional Budget Office (CBO) found last week that the bill would add $2,4 trillion to the national debt over the next decade while cutting Medicaid and food aid. The CBO analysis found that the bill, which passed the House by just one vote and without Democratic support, would leave an additional 2034 million Americans without health insurance by 10,9.

The accounts, which are provided by the Treasury Department, were previously called “MAGA accounts” and resemble existing 529 plans but with lower contribution limits. That has some advisers questioning whether Trump’s accounts will provide the best investment terms. (529 plans are special investment accounts in the United States designed to save for education. They exist under Section 529 of the Internal Revenue Code. — Note.)

However, this is not a unique initiative: a similar program, Child Trust Fund, existed in the UK from 2002 to 2011, and in Singapore there is a Baby Bonus project, which provides government co-financing of savings for children.

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Trump expressed optimism about the accounts' future returns, saying their holders "will get a real head start in life, especially if we have a little bit of luck with the numbers and the economy going forward."

Johnson warned that failure to pass the bill would result in "the largest tax increase in U.S. history" and called on Congress to immediately pass what he called a "growth bill" that would "help every American."

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