Trump touts ‘Trump accounts’ for babies as part of affordability pitch

By Bo Erickson and Andrea Shalal

WASHINGTON, Jan 28 (Reuters) – President Donald Trump on Wednesday rolled out his government-supported investment accounts for babies in the United States and urged American businesses to contribute to employees’ family accounts.

The White House is setting up these investment accounts for newborns in the next three years with initial government seed money. Trump and his Republican Party have been seeking to address voters’ affordability concerns ahead of the November midterm elections.

“Decades from now, I believe the Trump accounts will be remembered as one of the most transformative policy innovations of all time,” Trump said at the Washington event, which welcomed many babies to underscore his administration’s pro-family messaging.

The accounts – named after Trump – were created last year under the president’s One Big Beautiful Bill Act, his party’s signature tax and spending legislation.

The U.S. Treasury says it will deposit $1,000 into investment accounts for all children born between 2025 and 2028, with some 25 million families estimated to be eligible.

The government will invest the money in low-cost index funds that grow tax-deferred. Income taxes are due upon withdrawal. 

The accounts officially come online on July 4 this year, and Treasury Secretary Scott Bessent said more than 500,000 families have already signed up.

Trump said the accounts will be measured “not just in wealth created, it will be seen in young people buying houses that they could never have even dreamed of buying. It’ll be seen in diplomas earned, companies founded, families formed, and more babies born.”

The White House is encouraging families to make additional contributions to these accounts, and some private investors have already contributed more, like the $6.25 billion investment by entrepreneur Michael Dell and his wife Susan.

White House press secretary Karoline Leavitt said on Wednesday the accounts would address the lack of savings accounts for many American families.

With no additional contributions, the administration expects the accounts to be worth $5,800 by the time the newborn babies turn 18.

But if families contribute the maximum $5,000 each year, Leavitt said the account could accrue almost $1.1 million by the time the newborn turns 28. She did not share calculations to explain how the administration arrived at that amount.

Financial analysts estimated that maxing out contributions would yield a portfolio of around $700,000 by age 28.

The analysts compared the Trump accounts to retirement accounts, as the account converts into a traditional IRA at age 18, and also noted that taxes will need to be assessed at the time of withdrawal.

Major companies in the U.S. – like Visa and IBM – have pledged contributions to their U.S. employees’ accounts, and Trump called on “all employers” across the country to follow suit.

Ahead of the midterm elections – when Republicans will be fighting to retain control of Congress – the Trump administration is pushing the accounts as a win for both Democrats and Republicans.

Republicans view Trump as their best messenger on economic issues and count on him to win over skeptical voters, even though public opinion polling shows more Americans are souring on his handling of the economy.

To help promote the accounts, the president invited rapper Nicki Minaj, who stood out in a white fur outfit amid a Washington crowd in dark suits, to the stage.

“I am probably the president’s number-one fan, and that’s not going to change,” Minaj said, adding that she would not be deterred by opponents of his policies.

(Reporting by Andrea Shalal, Susan Heavey, David Lawder and Bo Erickson in Washington; Additional reporting Bhargav Acharya and Ryan Jones in Toronto, and Gram Slattery, Daphne Psaledakis and Doina Chiacu in Washington; Editing by Ross Colvin, Chizu Nomiyama and Matthew Lewis)