One Big Beautiful Bill: Why Is Donald Trump Pushing Cash For American Babies?

President Trump proposed "Trump Accounts" under his tax cut bill, offering $1,000 tax-exempt investment accounts for babies born between 2025-2028.

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US President Donald Trump (Image: Reuters)

In a significant move aimed at enhancing the lives of American babies, US President Donald Trump has proposed a new initiative under his tax cut bill which he calls “One Big Beautiful Bill".

President Trump talked about a provision in his tax and spending bill that proposes opening investment accounts for every American baby born during his current presidential term. Referred to as “Trump Accounts", the new tax-exempt investment accounts will benefit American babies belonging to families of all income levels.

Trump Accounts: One-Time Contribution Of $1,000

The new plan is a part of the broader tax reform package, and it aims to provide a one-time contribution of $1,000 from the federal government to a tax-deferred account for each American baby born between January 1, 2025, and December 31, 2028.

These accounts will be designed to track the overall stock market and will be managed by the child’s guardians until the child turns 18. The program also has the provision for parents to contribute up to $5,000 annually to the account, with contributions being tax-free.

When Can Child Avail Funds?

Earlier on Monday, the US president explained the benefits of the program during a roundtable, noting that the funds will be invested in mutual or index funds tied to the stock market’s performance, offering the potential for growth over time. The money would only be available when the child turns 18 and could be used for a down payment on a home, education, or starting a small business. However, the money would be subject to higher taxes if used for other purposes.

When the child turns 30, the full balance of the account would be available for withdrawal. This initiative focuses on helping young Americans build wealth and secure their financial future, though the long-term impact remains uncertain. The plan, initially called “MAGA Accounts," has drawn mixed reactions, but it represents a significant shift in how the federal government might support future generations.

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Estimated Budget For Proposed Plan

As per estimates, US witnesses about 3.6 million births each year so the cost could exceed $3 billion annually, the Washington Post reported. So far, no cost estimates have been released for the program by the Republicans.

About the Author

Manisha Roy

Manisha Roy is a Senior Sub-Editor at News18.com's general desk. She comes with an experience of over 5 years in media industry. She covers politics and other hard news. She can be contacted at Manisha.Roy@nw18...Read More

Manisha Roy is a Senior Sub-Editor at News18.com's general desk. She comes with an experience of over 5 years in media industry. She covers politics and other hard news. She can be contacted at Manisha.Roy@nw18... Read More

Location :
New York, United States of America (USA)

First Published:
June 11, 2025, 09:58 IST