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Senator Ted Cruz is celebrating the launch of "Trump Accounts," a new savings program that will provide $1,000 to every American child born during President Donald Trump's second term.
At a White House summit on Wednesday (January 28), the Texas Republican, who led the effort in Congress, touted the program as creating "a new generation of capitalists" who will invest in America's biggest companies.
"The answer to more socialism is more capitalism," said investor Brad Gerstner at the event, echoing a sentiment shared by many supporters. "This makes every child in America a capitalist from birth."
The program, officially established through the One Big Beautiful Bill Act, provides a $1,000 tax-free government deposit for babies born between January 1, 2025, and December 31, 2028. The money will be invested in U.S. equity index funds and can only be accessed when the child turns 18 for specific purposes like education, starting a business, or buying a home.
"Every president in modern history has left our children with nothing but debt," President Trump said at the event. "But under this administration, we're going to leave every child with real assets and a shot at financial freedom."
The initiative has gained significant private sector support. Major companies including JPMorgan Chase, Bank of America, Intel, and Uber have announced plans to match the government's $1,000 contribution for their employees' children. Philanthropists have also stepped forward, with Michael and Susan Dell pledging $6.25 billion to provide $250 in seed money for 25 million children who are 10 and under.
To qualify for the government's $1,000 contribution, a child must be a U.S. citizen with a Social Security number born during the specified timeframe. Parents can register using IRS Form 4547 when filing taxes or through an online portal opening this summer, though the accounts won't be open for contributions until July 2026.
Parents can contribute up to $2,500 annually in pretax income, with yearly contributions capped at $5,000. Employers, relatives, and charitable organizations can also contribute to the accounts.
Critics of the program argue it does little to help children in their early years and may widen the wealth gap, as affluent families who can afford to make maximum contributions will see the greatest benefits. They also note the accounts were created in the same tax bill that reduced spending for other programs benefiting young families.
Assuming a 7% annual return, the initial $1,000 government contribution would grow to approximately $3,570 over 18 years. Americans for Tax Reform has been tracking private sector participation in the program, with numerous financial institutions and corporations announcing matching contributions for their employees' children.