Trump's ‘big beautiful bill' proposes a MAGA bank account for kids. What does it mean?
What President Donald Trump has referred to as his 'big beautiful bill,' currently being shepherded through Congress, includes a proposal for a 'MAGA' savings account for children.
The savings account name stands for 'money account for growth and advancement,' but shares an acronym with the Trump slogan, 'Make America Great Again.'
The bill's own name also harkens back to what Trump has called it. The legislation is called 'the one, big, beautiful bill' in all capital letters and includes a number of Trump's campaign pledges.
House Republicans have come under pressure to pass tax reform, which Trump pledged to do during the campaign.
The MAGA account is a tax-advantaged account that can be opened for children aged eight and under. They then won't be able to access the account until they turn 18, Newsweek noted.
The legislation says that the federal government would add $1,000 to the accounts of children born between 2025 and 2028; however, contributions are limited to $5,000 a year. Eligible children must be U.S. citizens 'at birth' and have a Social Security number.
Republican Texas Senator Ted Cruz has been a proponent of the idea of a savings account for children.
'The case I made to my colleagues is: We should ask ourselves in this bill, what will be the legacy that people will remember and talk about 10 years from now, 20, 30, 40 years from now?' Cruz told Semafor earlier this month.
The legislation would create accounts for 'every child born in America to help them begin the journey of savings and benefit from the wonders of compound interest,' he added.
In the House legislation, the proposal is listed as the "MAGA Accounts Contribution Pilot Program." The accounts would be "exempt from taxation,' the draft of the House bill states.
Democratic New Jersey Senator Cory Booker has previously put forward the idea of 'baby bonds,' which also suggested putting $1,000 in savings accounts for U.S. babies.
The savings account is a small part of a massive bill that currently suggests tax cuts of $4.9 trillion to aid tipped workers and those working overtime, as well as retired Americans. The cuts would partly be funded with cuts to Medicaid, food stamps, and green energy initiatives.
It would also hit private universities with a new endowment tax of as much as 21 percent. For instance, Harvard remains reliant on its endowment amid a legal battle with the Trump administration. The Trump White House has removed Harvard's federal funding and said that it will remove the university's tax-exempt status. Harvard has said the effort has 'no legal basis.'
The bill would also increase the federal debt ceiling by $4 trillion. Trump has spoken about the matter in private for months, noting that he wouldn't want to be pushed into a spending agreement with Democrats to avoid a default, Politico reported.
'When I return from the Middle East, where great things will happen for America, we will work together on any and all outstanding issues, but there shouldn't be many — The Bill is GREAT. We have no alternative, WE MUST WIN!' Trump wrote on Truth Social on Monday.
'I sure hope House & Senate leadership are coming up with a backup plan,' Texas Republican Rep. Chip Roy wrote on X on Monday. 'Because I'm not here to rack up an additional $20 trillion in debt over 10 years or to subsidize healthy, able-bodied adults, corrupt blue states, and monopoly hospital CEOs.'
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