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yesterday

Bessent’s ‘Backdoor for Privatizing Social Security’ Comment Puts Trump Accounts Under Scrutiny

Democrats seized on that statement to demand safeguards that the children’s investment accounts will only supplement Social Security as Treasury finalizes regulations for their mid-2026 launch

President Donald Trump, right, shakes hands with Treasury Secretary Scott Bessent, left, as Sen. Dave McCormick, R-Pa., center, looks on at the "Inaugural Pennsylvania Energy and Innovation Event" at Carnegie Mellon University, Tuesday, July 15, 2025, in Pittsburgh.
Treasury Secretary Scott Bessent attends a meeting in the Oval Office at the White House in Washington, DC, on July 22.

Overview

  • On July 30 at a Breitbart event, Treasury Secretary Scott Bessent said the new savings accounts serve “in a way” as a backdoor to Social Security privatization and later posted that they are intended to supplement, not replace, guaranteed benefits.
  • Critics including DNC spokesperson Tim Hogan and lawmakers such as Rep. Richard Neal and Sen. Jack Reed warned the remark exposed a hidden agenda to undermine the retirement system.
  • The White House and Treasury stress that Trump Accounts—seeded with $1,000 for each child born from 2025 to 2028—will grow tax-deferred in equity-index funds and accept up to $5,000 in annual family or employer contributions.
  • Treasury and IRS officials are finalizing detailed guidance on investment rules, contribution limits and withdrawal conditions ahead of the program’s automatic enrollment slated for mid-2026.
  • Proponents say the accounts will foster financial literacy and early wealth building, while opponents question their impact on the federal deficit and whether forcing equity exposure could favor wealthier families.