After a long week of policy proposals and conversations with our colleagues, we here at the Institute felt it was important to share our perspective with you surrounding the House Republicans’ budget proposal establishing so-called “Trump Accounts”: these are not Baby Bonds and they will not promote economic inclusion. This is a vital policy matter—one that touches the core of our ongoing work to advance economic justice and close the racial wealth gap.

By now, many of you have likely heard about this new provision tucked into House Republicans’ latest budget: Money Account for Growth and Advancement or so-called “Trump Accounts.” On the surface, this initiative may seem like a step toward economic inclusion—a government-seeded account to help children begin building wealth. But we must not be misled by clever branding or superficial gestures.

Many of you have asked whether this is simply another version of Baby Bonds. Let us be clear: it is not. Indeed it is the co-optation of a good idea. 

As Institute founder Darrick Hamilton told MarketWatch on Tuesday, Trump Accounts “will enhance, rather than reduce, inequality” because they offer another tax-incentivized way for affluent families to transfer generational wealth.

“Baby Bonds emphasize the endowment investment and are progressively seeded, such that those children born into low wealth or lowest-income families receive a greater investment, so that they too have an opportunity to build wealth. This program as described is not Baby Bonds and far from the best way to invest government resources to promote wealth inclusion.”

Found on pages 79–99 of the Ways and Means Committee's budget draft, key features of the Trump Accounts include:

• A one-time federal contribution of approximately $1,000 for each child under the age of eight, born between January 1, 2025 and December 31, 2029

• Annual contributions of up to $5,000 from individuals, states, and local governments, deposited tax-free

• Limited to children whose parents have a social security number, excluding some American citizens

• Partial access to funds at age 18, with full access by age 25

• Approved uses include education, homeownership, and entrepreneurship

This is not a long-term, universal strategy for closing our nation's persistent racial and economic wealth divides and providing inclusive economic pathways for mobility for all its children. As Darrick told MarketWatch this week, a one-time deposit of $1,000 “will not redress the gross inequities around wealth that we experience in our country”—especially when many working-class and low-income families won’t be in a position to contribute anything further over time.

At a moment when we need bold, inclusive economic policy to address systemic inequality, the Trump Accounts proposal falls short—and may even entrench disparities under the guise of opportunity.

Here's why:

On our path to eventual Federal Baby Bonds policy (like the American Opportunity Act, introduced by US Senator Cory Booker and Congresswoman Ayanna Pressley), we are heartened by the momentum of Baby Bonds in the form of 11 pilot projects (where the Institute is leading a learning community) and state policy efforts in 20 states.

We believe eventual Federal policy will be grounded in the innovation, learning, and spirit we’re seeing at the local and state level:

If we truly want a society that invests in the health and wellbeing of children and their future as stakeholders, then the answer is clear: implement Baby Bonds. Not half-measures. Not privatized solutions. A bold public investment, rooted in justice, that finally affirms the economic worth and dignity of every child—not just the already privileged.