Source: Fortune
Summary
Republican Sen. Ted Cruz has suggested that the Trump accounts for American children, created by the One Big Beautiful Bill Act, are part of an effort to revamp Social Security. Cruz pointed out that he wrote the part of the legislation allowing parents to open tax-advantaged savings accounts for children under 18 with a Social Security number. He described the Trump accounts as Social Security personal accounts, which could eventually grow to as much as $1.9 million by the time a child turns 28. Cruz believes that as parents see their kids’ Trump accounts surge, they will become more open to changing how their own payroll taxes are spent. However, diverting today’s tax payments would affect today’s retirees, and the Social Security trust fund is projected to run out of money by 2034.
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The numbers tell one story.
Cruz’s comments highlight the sensitive topic of Social Security reform. The Trump accounts have been described as a way to build wealth and get a head start on saving for retirement, but critics have raised concerns about the impact on Social Security benefits. The White House has estimated that fully funded Trump accounts could eventually grow to as much as $1.9 million by the time a child turns 28. Treasury Secretary Scott Bessent has described the accounts as “a backdoor for privatizing Social Security,” but later clarified that they add to benefits alongside Social Security. As the U.S. debt continues to grow, the Trump accounts may become a key part of the conversation around Social Security reform.
The announcement sounds like a gentle nudge towards privatization.
Author: Evan Null
