Trump Accounts: $1,000 for Every Baby Born in the U.S.
What Is a “Trump Account”?
A new idea in Congress called a “Trump Account” could give babies a head start on saving money. If the plan passes, every baby born in the United States from January 1, 2025, to December 31, 2028, would get a $1,000 savings account from the government. This account would help families save money for things like school, buying a home, or starting a business when the child grows up.
This savings plan is part of a larger tax bill backed by former President Donald Trump and many Republican lawmakers. Supporters say it's a smart way to help American families. But others are worried about how much it will cost.
How Does It Work?
The idea is simple. When a baby is born between 2025 and 2028, the government would open a special savings account for that child. The account would start with $1,000 already in it.
After that, family members or other people can add more money to the account—up to $5,000 every year. The money can grow over time and be used later in life for important things like:
- Going to college or trade school
- Starting a small business
- Buying a home
- Emergency needs
The money in the account would grow tax-free, which means you don’t pay taxes on the interest or gains.
Why Do Supporters Like This Plan?
Many people think the Trump Account is a good idea. Here’s why:
1. Helps Families Save Early
Starting a savings account at birth helps families think long-term. Over 18 years, a small amount of savings each year can turn into something big.
2. Builds Financial Skills
As children grow up, they can learn how to manage money by watching their savings grow. This helps teach smart financial habits.
3. Can Break the Cycle of Poverty
Some supporters say this account could help children from low-income families have more chances in life. The money could help pay for school or other needs that lead to a better future.
4. Encourages Private Saving
Even though the government gives $1,000, families can add much more. This gets people into the habit of saving money on their own.
Why Are Some People Against It?
Not everyone thinks Trump Accounts are a good idea. Critics have shared some worries:
1. Too Expensive
Some experts say this plan could cost too much money. With millions of babies born each year, the $1,000 gift could add billions to the national debt.
2. Cuts to Other Programs
Others fear that to pay for the Trump Accounts, the government might cut programs like Medicaid or SNAP (food stamps), which help people in need.
3. Helps Rich Families More
Some say families who already have money will benefit more. They’re more likely to add the full $5,000 each year, while poorer families may not be able to add anything.
4. Could Be Misused
There are also questions about how the money will be spent. Will kids use the money wisely when they grow up? Will there be rules to make sure it’s used for good purposes?
How Much Could the Account Grow?
Let’s do a quick example. If a child gets $1,000 at birth and their family adds $1,000 each year for 18 years, the account could grow a lot—especially if it earns interest.
With just 5% yearly growth, that account could have over $30,000 by the time the child turns 18. That’s enough to help with college, a business idea, or a down payment on a house.
Who Gets One?
Right now, the plan says any baby born in the U.S. between 2025 and 2028 would get a Trump Account. It doesn't matter how much money the parents make. Everyone qualifies.
That means if this bill passes, millions of babies could each get their own savings account started by the government.
What Happens Next?
This plan is still just a proposal. That means it has not been approved yet. Congress needs to vote on it. If enough lawmakers agree, it could become law.
Supporters are working hard to make sure it passes. They believe it will help families, grow the economy, and create more equal opportunities. But critics are also speaking out, warning that it might cost too much and help the rich more than the poor.
Lawmakers are still debating the details. There may be changes to the plan before it becomes final.
What Should Families Do Now?
Right now, families don’t need to do anything. If the Trump Account plan becomes law, the government will share information about how to sign up and access the money.
In the meantime, parents who want to save for their child’s future can open their own savings account or 529 college savings plan. There are already many ways to start saving—even if the government program isn’t ready yet.