Bessent Defends 'Trump Accounts' as 'Rainy Day' Savings, Dismisses Wealth Gap Critics as Major Banks Join Initiative
WASHINGTON — Treasury Secretary Scott Bessent forcefully defended the controversial "Trump Accounts" program on Wednesday, framing the newly launched investment vehicles as essential "rainy day funds" for America's next generation. His comments come as financial giants JPMorgan Chase and Bank of America announced they would join the initiative, lending it significant corporate heft.
The program, established under the recent tax and spending law, creates tax-advantaged accounts for an estimated 25 million children born between 2025 and 2028. Each eligible child receives a $1,000 government-funded seed investment, with families permitted to contribute up to $5,000 annually per child.
Critics, including some economists and policy analysts, have warned that the structure could inadvertently widen the nation's wealth gap. They argue that the $5,000 annual contribution cap is a sum easily maxed out by affluent families but potentially out of reach for lower-income households, leading to vastly different outcomes for children based on family wealth.
Bessent dismissed these concerns in an interview with CBS, labeling critics "out of touch" with the financial realities of everyday Americans. "When you have millions of families who can't handle a $500 emergency expense, arguing about 'only $5,000' is a political luxury they don't have," Bessent stated. He emphasized the program's core aim is to serve middle- and lower-income families and pointed to mechanisms allowing philanthropists to target donations to specific school districts or economic quintiles as a potential mitigator.
The administration appears to be betting on broad appeal, and early numbers suggest some traction. Bessent revealed the program has seen 600,000 sign-ups in its first week. The private sector's involvement is expanding rapidly. Beyond JPMorgan and Bank of America—which will match the $1,000 seed contribution for eligible employees—a roster of financial firms including Charles Schwab, BlackRock, and BNY Mellon have contributed. High-profile pledges have also poured in, from Michael Dell's multi-billion dollar commitment to rapper Nicki Minaj's promise to fund fan accounts.
However, skepticism remains. Personal finance expert Dave Ramsey recently criticized the accounts as a "political stunt," arguing existing tools like Roth IRAs or 529 plans offer more proven, revolutionary benefits for savers.
Voices from the Public:
"Finally, a policy that thinks long-term. That $1,000 seed could compound into real opportunity for my newborn. It's a tangible step toward financial security for families like mine," said Marcus Chen, a teacher and new father from Columbus, Ohio.
"This is a massive tax giveaway to the wealthy, dressed up as help for the poor. Bessent is being deliberately naive. The rich will max this out every year; the working poor will be lucky to put in $50. It institutionalizes inequality from birth," argued Dr. Elena Rodriguez, a sociology professor at a California university, her tone sharp with criticism.
"The corporate matching is the real story here. It shows serious institutional buy-in. If it gets more people investing and thinking about the market long-term, that's a net positive for financial literacy," noted David Park, a financial advisor based in Chicago.
Image via Shutterstock