Treasury Secretary Scott Bessent sparked debate Wednesday by describing the newly unveiled Trump accounts as a potential game-changer for retirement savings—and a "backdoor for privatizing Social Security." The tax-deferred savings accounts, introduced under President Trump's recent tax law, allow parents to invest up to $5,000 a year on behalf of their kids, with contributions also permitted from employers and charities. Each child born from 2025 to 2028 will also receive a $1,000 government contribution, regardless of family income. The funds, which must be invested in US stock indexes, resemble IRAs: penalty-free withdrawals are allowed at retirement age, or earlier for education or a first home purchase, per Politico.
Bessent promoted the program at a Breitbart event, pitching it as a way to boost financial literacy and get younger Americans invested in the economy. He argued these accounts could make "everyone a shareholder." "In a way, it is a backdoor for privatizing Social Security," he added. Top Democrats, including Senate Minority Leader Chuck Schumer, seized on the remark, accusing the Trump administration of undermining the president's pledge not to touch Social Security. Bessent later wrote on X that the Trump accounts are meant to supplement, not replace, Social Security. The Treasury Department echoed that message, saying Bessent's comments were taken out of context. (Some argue the accounts will make the wealth gap worse.)
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