Treasury secretary calls new Trump accounts ‘a backdoor' way to privatize Social Security

CNN

5 days ago

Donald TrumpFacebookTweetLink
Follow
Treasury Secretary Scott Bessent on Wednesday likened the Trump accounts created by Republicans' massive new domestic policy law to 'a backdoor for privatizing Social Security.' Democrats are already launching political attacks.
Bessent was discussing the Trump accounts at a Breitbart policy panel. The federal government will contribute $1,000 into these new tax-deferred investment accounts for US citizen children born between 2025 and 2028, while parents and others can contribute up to $5,000 annually. The funds are intended to be used for higher education, buying a home or starting a small business.
The accounts can also be used to help Americans better understand investing and serve as a way to save for retirement, Bessent said. Then he threw out a comment that had Democrats immediately up in arms.
'In a way, it is a backdoor for privatizing Social Security,' he said. 'Social Security is a defined benefit plan paid out. To the extent that if, all of a sudden, these accounts grow and you have in the hundreds of thousands of dollars for your retirement, then that's a game changer, too.'
Democrats have long accused Republicans of wanting to privatize Social Security — a topic that sparks intense reactions from Americans who are suspicious of plans to harm the program after they've paid into it for years — and have resurfaced the issue during President Donald Trump's second term.
'Donald Trump's Treasury Secretary Scott Bessent just said the quiet part out loud: The administration is scheming to privatize Social Security,' Tim Hogan, the Democratic National Committee's senior adviser for messaging, mobilization and strategy, said in a statement. 'Trump is now coming after American seniors with a 'backdoor' scam to take away the benefits they earned.'
Privatizing Social Security would also enrich Wall Street, said Massachusetts Rep. Richard Neal, ranking member of the House Ways and Means Committee.
'Republicans' ultimate goal is to privatize Social Security, and there isn't a backdoor they won't try to make Wall Street's dream a reality,' Neal said in a statement. 'For everyone else though, it's yet another warning sign that they cannot be trusted to safeguard the program millions rely on and have paid into over a lifetime of work.'
Asked for comment on Bessent's remarks, a Treasury Department spokesperson said that 'Social Security is a critical safety net for Americans and always will be.'
'Trump Accounts are an additive government program that work in conjunction with Social Security to broaden and increase the savings and wealth of Americans,' the spokesperson said in a statement to CNN.
Republicans in Congress last made a major effort to establish private Social Security accounts in 2005, during George W. Bush's second term. It proved unsuccessful after sparking heavy blowback.
Bessent also said Wednesday that the Trump accounts would help address people who are disillusioned with 'the system,' referencing New York State Assemblyman Zohran Mamdani's unexpected win in the Democratic primary for New York City mayor. Mamdani is a democratic socialist.
'When you do this, you make everyone a shareholder,' Bessent said. 'People who are part of the system do not want to bring down the system.'
This story has been updated with additional details.