On Wednesday, Scott Bessent, the Secretary of the United States Treasury, stated in an interview with Breitbart News that President Trump signed into law this month the “Big and Beautiful Act” new baby savings account program – the Trump Baby Accounts (also known as Trump Accounts), as an additional benefit aimed to supplement the existing social security system and ensure retired individuals have more income.
This new savings account is designed to encourage new parents to save money for their children while also fostering financial knowledge in the child as they grow. The federal government will provide a one-time $1,000 grant for every newborn in the United States, to be deposited into the account for investing in the U.S. stock index, and allows families to additionally deposit up to $5,000 per year for investment.
Bessent explained, “We are involving the people in building the financial and welfare system of the government to enhance financial literacy. If you have a pet, you understand everything about it. So if you have these accounts – why invest like this? How do you operate it? How do you understand the power of compound interest?”
Bessent mentioned that the details such as the timing of disbursement and the purposes of the funds for the newly established savings account still need to be clarified.
In a post on Platform X, Bessent stated, “The Trump Baby Account is a welfare provided for future generations, assisting in supplementing the basic benefits of the social security system. This is not an either-or issue: our government is committed to safeguarding the social security system and ensuring that the elderly have more funds.”
“This is also why President Trump’s ‘Big and Beautiful Act’ will cut taxes for those receiving social security benefits. Under the leadership of the President, we are tirelessly working to bring prosperity to all Americans.”
Bessent stated in the interview that this new account may become a path towards the “privatization” of the social security system from a certain perspective. He pointed out that while social security is a fixed benefit plan, if the assets of these accounts grow rapidly, accumulating to hundreds of thousands of dollars for retirement, it will have a significant impact on the existing system.
However, the Trump administration has not indicated any intention to move in this direction.
Senator Ron Wyden, a senior Democratic member of the Senate Finance Committee, expressed concerns about Bessent’s comments on Wednesday and opposed policies that could lead to the privatization of the social security system.
The U.S. social security system, established in the 1930s, is a federally operated system of social insurance providing retirement benefits to American citizens and some non-citizens.
The Social Security Administration did not provide any comment.
(This article references Reuters and Breitbart News)