Treasury Secretary Scott Bessent has described a newly introduced government program known as “Trump Accounts” as a potential step toward privatizing Social Security—drawing praise from conservatives and sharp criticism from Democrats.
Unveiled as part of President Donald Trump’s recently passed legislative package, dubbed the “Big, Beautiful Bill,” the new initiative provides every American child born between 2024 and 2028 with a one-time $1,000 federal contribution. These funds are deposited into stock market-tied accounts such as mutual or index funds, intended to build long-term wealth through compound growth.
Speaking at a policy forum hosted by Breitbart News on July 30, Bessent said, “In a way, it is a backdoor way for privatizing Social Security.” He emphasized the accounts’ potential to change the retirement landscape by allowing individuals to accumulate hundreds of thousands of dollars over time.
While the bill does not directly alter the current Social Security system, Bessent’s remarks triggered political backlash. Rep. Brendan Boyle (D-Pa.) wrote on X (formerly Twitter):
“Trump White House openly admits their plan to privatize Social Security. I will fight them with everything I got to keep their grubby little hands off it.”
In response to the criticism, Bessent clarified his comments:
“Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments. This is not an either-or question.”
Program Details:
-
Eligibility: All U.S. citizen children born from 2024 to 2028; no income restrictions; both parents must have Social Security numbers.
-
Initial Federal Contribution: $1,000.
-
Parental Contributions: Up to $5,000 annually; tax-deferred.
-
Qualified Withdrawals: Can be used starting at age 18 for education, a first home, or starting a business.
-
Tax Rate: Qualified withdrawals are taxed at long-term capital gains rates.
The accounts are part of a broader Republican-backed legislative package that extends Trump’s 2017 tax cuts, eliminates taxes on tips, slashes Medicaid and food stamp programs, and allocates billions toward border security.
Democrats argue the program risks eroding public support for Social Security and could lay the groundwork for its eventual privatization. The debate mirrors past political battles—most notably President George W. Bush’s failed 2005 attempt to allow partial privatization of Social Security.
Despite criticism, the Treasury Department says the accounts aim to promote financial inclusion and literacy. Bessent cited a personal encounter with construction workers buying lottery tickets, saying:
“I told them the best thing they could do is save that $20. With these new accounts, they can become part of the system and build long-term financial security.”
The “Trump Baby Accounts” are expected to become available in July 2026.
