A key provision in President Trump’s “Big Beautiful Bill” will give every child born between 2025 and 2028 a $1,000 government-funded account at birth. The accounts, modeled after individual retirement accounts, are designed to help children build long-term savings for education, housing, or starting a business.
The program is simple in concept. Each account will be opened automatically and managed through the Treasury. Families can contribute up to $5,000 a year, with employers allowed to pitch in up to $2,500. The money will be invested in low-cost index funds and will grow tax-deferred until the child turns 18. Withdrawals are only allowed for certain approved uses like college tuition or a down payment on a home.
Supporters say the accounts could provide a financial head start for an entire generation. If invested wisely, the $1,000 could grow into tens of thousands of dollars by adulthood. Critics, however, point out that higher income families may be better positioned to make extra contributions, potentially widening existing wealth gaps. Others question the cost of the program, which could reach $3 to $4 billion a year at a time when the bill also cuts safety net programs like Medicaid and SNAP.
The broader goal of encouraging early saving has drawn attention from both sides of the aisle. While details may change in the Senate, the creation of these accounts signals a shift toward market based policies to support young Americans. Whether the accounts succeed in closing opportunity gaps or simply mirror them will depend on how families use them.