Trump, CEOs unveil 'Invest America' savings accounts for newborns

UPI

6 hours ago

June 9 (UPI) -- President Donald Trump on Monday unveiled plans for the U.S. government and companies to collectively invest money in savings accounts for employees' children as part of the $1.45 trillion discretionary spending bill.
The "Invest America" roundtable in the State Dining Room at White House included CEOs from several companies, as well as U.S. House Speaker Mike Johnson and other House members.
The budget bill passed narrowly by the U.S. House last month and has moved to the Senate. Republicans want the bill signed by Trump before the Fourth of July.
The federal savings program has been referred to "Trump accounts," "Money Accounts for Growth and Advancement" and "MAGA Accounts."
The pilot program would seed index fund accounts with $1,000 in Treasury Department funds for U.S. citizens born between Jan. 1, 2025, and Dec. 31, 2028. Companies, employees, other family members and friends also can make post-tax contributions up to $5,000 annually.
The CEOs participating were Michael Dell of Dell Technologies, Brad Gerstner of Altimeter Capital, Rene Haas of Arm Holdings, Parker Harris of Slack and Salesforce, William McDermott of ServiceNow, Dara Khosrowshahi of Uber, David Solomon of Goldman Sachs, Vladimir Tenev of Robinhood.
"They really are the greatest business minds we have today," Trump said. "These men and women lead large, successful companies. And they are committed to contributing millions of dollars to the Trump account. It's really to be something incredible for children and their employees."
He singled out Dell, who months ago presented the idea to the president. He started his company from a garage in 1984 in Austin, Texas, and it has grown into a company worth $78 billion.
Dell said his company will match dollar for dollar the $1,000 from the government and his foundation will make a "significant gift."
The computer CEO called it a "simple yet powerful way to transform lives. ... This is an investment in our people, their families, our communities and America's future."
Trump said: "Extensive research shows children with savings accounts are more likely to graduate high school and college, buy a home, start a business and are less likely to be incarcerated."
The accounts' performance will be based on a U.S. stock market's index fund. The accounts would be controlled by children's guardians until they turn 18.
The account beneficiary will be able to withdraw up to 50% of their balance beginning at age 18 with full access at 25 for qualified purposes and no restrictions at 30.
A $1,000 investment in the Standard and Poor 500 exchange-traded fund trust made 18 years ago would be worth $5,590 today, according to FactSet data. That same investment 31 years ago would be worth $22,770.
The pilot program is similar to other savings account options, including 529 college savings plans, which also have contribution limits.
Some already offer a type of "baby bonds" program for parents.
They are also like 401 (k) accounts offered by businesses with tax savings and the power of compound interest over several years.
"Trump accounts take it from the same principle and they apply it from the very beginning of Americans' lives," Johnson said. "It is a pretty simple concept."
The savings account proposal is one small aspect of the budget legislation.
"The passage of the One Big Beautiful Bill will literally change the lives of working, middle class families across America by delivering the largest tax cuts in history, increasing the child tax credit, and by creating this incredible new 'Trump Account' program, which will put the lives of young Americans on the right financial path!" White House press secretary Karoline Leavitt told CNBC in a statement.
The legislation includes an extension of expiring tax cuts from 2015 and money for immigration.
Some Republicans, as well as Elon Musk, who ran the Department of Government Efficiency, don't want to add the debt of $26.2 trillion. The Congressional Budget Office projects it will increase federal deficits by about $2.4 trillion over a decade.
"I didn't go out to craft a piece of legislation to please the richest man in the world," Johnson, R-La., said in response to Musk's criticisms in an interview with ABC News on Sunday. "What we're trying to do is help hardworking families who are trying to make ends meet."