1.3M Kids Get $1,000 Head Start from Trump Accounts, Adding $1.3B to Deficit; Tax Benefits Favor Wealthier Families
By Eileen Mamaghani, Cronkite News
October 9, 2026
WASHINGTON – Since July, approximately 1.3 million young Americans have received $1,000 each in newly created Trump Accounts, costing taxpayers $1.3 billion. Nearly 70 million of these tax-deferred investment accounts have been established for Americans under 18 since their launch on July 4, according to the White House.
The initiative is part of the One Big Beautiful Bill, signed by President Donald Trump in July 2025.
“It’s a unique, once-in-a-lifetime opportunity for them and for us as parents,” said Bryce Webber, a senior advisor at Mariner Wealth Advisors in Scottsdale, who opened a Trump Account for his daughter, born last year. Webber urges other parents to research and claim this benefit.
Eligibility for the one-time $1,000 seed contribution from the Treasury is restricted to U.S. citizen children born during Trump’s second term, though others under 18 can also use the accounts. Funds can be accessed when the child turns 18, with a parent or guardian required to claim the account.
Amid a national debt of $40.3 trillion, critics are skeptical of such taxpayer-funded measures. The latest federal budget deficit was $2 trillion, and projections suggest it could reach $3.1 trillion by 2036 as debt interest grows.
Adam Michel, director of tax policy studies at the Cato Institute, remarked, “While this is a very small line item in the grand scheme, all these little things add up. We are digging our fiscal hole deeper every year.” He noted that parents facing financial strain may withdraw funds early, limiting long-term investment benefits and possibly widening the wealth gap.
According to the White House, $1.3 billion has been deposited into accounts through October 7, benefiting 1.3 million children. Additionally, relatives have contributed $600 million, while philanthropists have added $2.6 billion, totaling $4.5 billion.
Josh Gotbaum, an economist at the Brookings Institution, believes such accounts often benefit wealthier families more. He described Trump Accounts as one of the least regressive aspects of the One Big Beautiful Bill, which favored higher-income taxpayers.
The $1,000 contribution is awarded to U.S. citizen children born between 2025 and 2028, including those born during the last days of Trump’s term.
Nolan High, a farmer who signed his daughter up for a Trump Account, views it as a great way for early investing but admits he likely won’t add more funds.
These accounts function similarly to Individual Retirement Accounts, with investment growth being tax-deferred. While contributions from family and friends aren’t deductible, employers can contribute up to $2,500 annually without it counting as taxable income. Investment options are limited to low-cost funds tracking the U.S. stock market index.
Once recipients turn 18, traditional IRA rules apply, including a 10% penalty for withdrawals before age 59½, though accounts can be used without penalty for college tuition or first-home purchases.
Dawn Noble, a member of the Arizona chapter of the Financial Planning Association, warns that those lacking financial literacy might misuse these accounts as savings once they turn 18. She advocates for more public education on the matter.
“This article first appeared on Cronkite News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.”
