“Trump accounts fall drastically short of addressing the real hurdles Americans face.”

“In a just nation, everyone should have the economic power and financial opportunity to build wealth and live the productive life they choose. That’s what baby bonds offer: real solutions to wealth inequality and real investments that can transform the future for millions of children.”

Full Op-Ed Here

WASHINGTON – In an op-ed published in the Washington Post, Congresswoman Ayanna Pressley (MA-07) and economist Darrick Hamilton discussed the regressive, ineffective “Trump Accounts” provision of Republicans’ reconciliation bill, outlined how Trump Accounts fall short of what is needed to close the wealth gap in America, and urged Congress to embrace Baby Bonds to advance economic justice.

For over six years, Rep. Pressley and Senator Cory Booker (D-NJ), in partnership with Mr. Hamilton, have championed Baby Bonds, bicameral legislation to close the racial wealth gap, disrupt cycles of intergenerational poverty, and make economic opportunity a birthright for every child.

The full text of the op-ed is available below and can be read on the Washington Post website here.

Washington Post Op-Ed: ‘Trump accounts’ will save kids? Republicans can’t be serious.
By Rep. Ayanna Pressley and Darrick Hamilton
June 11, 2025

In the United States, the wealthiest nation in the world, a child born into poverty is unlikely to ever climb out of it. Wealth inequality in this country has reached historic highs, with the top 10 percent of households holding 67 percent of the nation’s wealth, while the bottom 50 percent holds just 2.5 percent. This means that millions of children grow up lacking basic economic security.

Now as much as ever, we need real investment in our children.

The Republican reconciliation bill that recently passed the House does nothing to address our glaring wealth inequality. Not only does it slash Medicaid, food assistance and other essential programs for the more than 30 percent of Americans who can’t put together $400 for an emergency expense, but also tucked into this harmful bill are provisions that claim Americans can build wealth through “Trump accounts.” Under the GOP proposal, every child born in the next four years would receive a one-time $1,000 government contribution into a tax-free investment account, to which families may contribute up to $5,000 annually.

But this is not a serious solution.

Trump accounts fall drastically short of addressing the real hurdles Americans face. These accounts are built on the presumption that individuals lack the incentive to save. In fact, what they lack is disposable income. Anyone can lawfully open a savings account for their child, such as a 529 account for college, but most are not positioned to take advantage of such accounts. A 2016 Federal Reserve Bank study found that just 2.5 percent of all families had a 529 savings account — and among households in the bottom half of the income distribution, that number dropped to only 0.3 percent. Most are not positioned to take advantage of new savings accounts. And by restricting eligibility to children born in the next four years, the proposal makes clear it was never intended to truly confront generational poverty and the wealth gap.

Trump accounts are structured to benefit primarily more affluent families — those who already have money to invest. For those struggling to put food on the table or afford a doctor’s visit, the choice isn’t between consumption and investment — it’s between groceries and medicine. Though many Americans could use real support — such as extra cash when a new baby arrives — the Republican bill moving through the Senate threatens to slash essential programs, leaving families worse off. And ironically, it contains no provision to protect low-income recipients from the “benefit cliff” — the asset limits that could disqualify them from essential services such as housing or income support once they reach adulthood.

Contrast this with the legislative vision we’ve championed for more than six years: baby bonds.

Known in Congress as the American Opportunity Accounts Act, the legislation to create baby bonds is rooted in the principle that every child, no matter their race, family income or birth circumstances, deserves a fair shot at building wealth and securing their future.

Here’s how it works: Every child receives $1,000 at birth. But unlike Trump accounts, baby bonds don’t stop there. Children would continueto receive additional deposits from the government every year, progressivelyscaled to family income. These funds would grow over time in safe, federally managed investment accounts. At age 18, young adults could access their accounts to pay for allowable expenses, including homeownership, higher education or starting a business — the kind of human and financial capital investments that change life trajectories. Building wealth from birth this way is cost-effective — supercharging dollars through years of interest — and also disrupts the cycle of intergenerational poverty.

Baby bonds also tackle the root problem of asset inequality — something the regressive tax structure of the Trump accounts does not fix. Rather than simply encouraging investment by those who already have the money, baby bonds seek to ensure that everyone has a meaningful stake in the economy and an opportunity to build financial stability and wealth.

Baby bonds wouldn’t replace private investment — they would complement it by providing every young person with a baseline of security. They would create a public foundation of capital while still allowing private investment and individual agency. In doing so, they don’t displace the market but expand the pool of those who can benefit from it.

There is also a deeper issue at play. Trump accounts amount to a government subsidy for asset managers — another tax-advantaged inflow into the financial services industry. In effect, they are a backdoor giveaway to Wall Street, wrapped in the rhetoric of economic populism.

Our country has a long history of wealth-building programs that expanded opportunity — from the Homestead Act to the GI Bill, which led to the greatest expansion of the middle class in U.S. history. But too often, those benefits were not accessible to all Americans, especially Black Americans and Native Americans, from whom much of the land seeded in the Homestead Act was taken, often violently. We now have the chance to design a 21st-century wealth-building initiative that is inclusive, equitable and grounded in sound economic theory and evidence.

We vehemently oppose the Republican budget reconciliation bill and urge the Senate to halt this attack on Medicaid, food assistance and more. In a just nation, everyone should have the economic power and financial opportunity to build wealth and live the productive life they choose. That’s what baby bonds offer: real solutions to wealth inequality and real investments that can transform the future for millions of children.

Darrick Hamilton is chief economist at the AFL-CIO and director of the Institute on Race, Power and Political Economy at the New School. Ayanna Pressley, a Democrat, represents Massachusetts’s 7th Congressional District in the U.S. House of Representatives.

###