President says every eligible child now enrolled in a Trump Account

President Donald Trump announced Wednesday that every eligible child, aged 18 and under, had been automatically enrolled in a tax-advantaged investment savings account, or Trump Account. Trump characterized the accounts as the children’s future and said they granted them a fair shot at the American dream.

How does the Trump account work? The Trump Account is a tax-free investment account that is expected to grow over the course of the child’s life, which he or she can access after they turn 18. As of Wednesday, 10 million out of 70 million accounts had been funded, according to the president. By the end of the week, the Trump administration anticipated that 25 million accounts would be funded. Treasury Secretary Scott Bessent explained that the U.S. Treasury would fund a $1,000 deposit into the account of every child born during the Trump administration. Philanthropists like Susan and Michael Dell also contributed to accounts of children aged 18 and under. In total, the Dells contributed $6.25 billion to those children, which translated to $250 for 25 million accounts. More than 70 large companies had already contributed to these accounts, the president said. Trump pointed parents to a Trump Account app they could download to start managing their children’s accounts immediately.

What are the critics saying? The Cato Institute identified what it described as a flaw in the structure of the investment accounts. Family contributions go in after taxes, just like money put into a regular brokerage account, but unlike a brokerage account, the investment gains are later taxed as ordinary income instead of at the lower capital gains rate, according to the institute. For many families, that means putting their own money into a Trump Account could leave their child worse off than using a normal taxable brokerage account, according to the Cato Institute.