Senator Ted Cruz proposes $1,000 federal investment account for every US newborn
US Senator Ted
Cruz
has introduced the
Invest America Act
, a new proposal aimed at boosting long-term financial security for Americans by giving every newborn child in the US a $1,000 investment from the federal government at birth.
The money would be placed in a private, tax-advantaged account that tracks the S&P 500 index.
According to a press release cited by Fox News, 'each Invest America account will be open to contributions from individuals, family members, friends, and businesses up to $5,000 annually.' These accounts would grow tax-deferred, with withdrawals allowed after the child turns 18 and taxed only at the capital gains rate.
Cruz believes the measure could help transform how future generations build wealth.
'Every child in America will have private investment accounts that will compound over their lives, enhancing the prosperity and economic participation of the vast majority of Americans,' he said, adding that it would be remembered as a 'landmark achievement' of the Republican-led Congress.
The launch of the Invest America Act comes amid growing national concern over the $36.2 trillion
US federal debt
.
While some critics may raise questions about cost, around 3.6 million babies were born in the US in 2024, meaning the initial investment would cost roughly $3.6 billion annually, reported Fox 26 Houston.
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Undo
The initiative gained momentum after a related pilot programme appeared in the House Ways and Means Committee's markup of tax reform legislation.
Dubbed
MAGA accounts
, short for Money Accounts for Growth and Advancement, the pilot would make the $1,000 federal contribution available only to children born between 2024 and 2028, and only if they are aged 8 or younger.
'What is powerful is enabling every child in America to have an investment account and a stake in the American free enterprise system,' Cruz said, as reported by Semafor.
The House Ways and Means Committee is set to review the broader legislative package, nicknamed 'The One, Big, Beautiful Bill,' on Tuesday.
The inclusion of MAGA accounts in that bill is seen as a major win for Cruz and his supporters.
If passed, the Invest America Act could create a new path for
childhood financial literacy
and investment, a move Cruz believes will secure 'fundamental and transformative changes for the financial security and personal freedoms of American citizens for generations,' as per Fox 26 Houston.
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