Bessent says new Trump child savings accounts are ‘back door for privatizing Social Security'
The idea of privatizing Social Security has been raised, and abandoned, by Republicans before, as millions of Americans have come to rely on the certainty of the federal government providing monthly checks in old age. Privatization proposals would shift the responsibility for retirement funds away from the government onto Americans, through personal savings accounts that may or may not be enough to live on.
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Under the GOP's 'big, beautiful bill,' as the law is called, Republicans launched a new children's savings program, Trump Accounts, which can be created for babies born in the U.S. and come with a potential $1,000 deposit from the Treasury.
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Much like an individual retirement account, the Trump Accounts can grow over time, with a post-tax contribution limit of $5,000 a year, and are expected to be treated similarly to the rules for an IRA, and can eventually be tapped for distribution in adulthood.
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But Bessent on Wednesday allowed for another rationale for the accounts, suggesting they could eventually be the way Americans save for retirement.
'In a way, it is a back door for privatizing Social Security,' Bessent said while speaking about the program.
Ever since the George W. Bush administration considered proposals to privatize Social Security more than 20 years ago, Republicans have publicly moved away from talking about the issue that proved politically unpopular and was swiftly abandoned.
In the run-up to the 2006 midterms, Democrats capitalized on GOP plans to privatize Social Security, warning it would decimate the program that millions of Americans have come to rely on in older age. They won back control of both the House and the Senate in Congress.
The Democrats warned Wednesday that Bessent's comments showed that Republicans want to shift the government-run program to a private one and are again trying to dismantle the retirement program that millions of Americans depend on.
'Donald Trump's Treasury Secretary Scott Bessent just said the quiet part out loud: The administration is scheming to privatize Social Security,' Tim Hogan, a spokesperson for the Democratic National Committee, said in a statement.
'It wasn't enough to kick millions of people off their health care and take food away from hungry kids. Trump is now coming after American seniors with a 'backdoor' scam to take away the benefits they earned,' Hogan said.
The program has faced dire financial projections for decades, but changes have long been politically unpopular.
Social Security's trust funds, which cover old age and disability recipients, will be unable to pay full benefits beginning in 2034, according to the most recent report from the programs trustees.
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Those officials have said those findings underline the urgency of making changes to programs.
Trump, attuned to Social Security's popularity, has repeatedly said he would protect it.
Throughout his 2024 presidential campaign, Trump repeatedly said he would 'always protect Social Security' and said his Democratic opponents, President Joe Biden and Vice President Kamala Harris, would destroy the program.
During the 2024 presidential primary campaign, he also accused other Republicans who have expressed support for raising the age for Social Security of being threats to the program.
Trump said in an interview with NBC's 'Meet the Press' in December after he won the presidential election, 'We're not touching Social Security, other than we might make it more efficient.'
His White House this year said Trump 'will always protect Social Security.'
Social Security Agency Commissioner Frank Bisignano, a Wall Street veteran, was asked at his confirmation hearing in March about whether Social Security should be privatized and said he'd 'never heard a word of it' and 'never thought about it.'
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