Trump's 'big, beautiful bill' includes a Ted Cruz proposal for $1,000 'MAGA accounts' for American babies
Ross D. Franklin/AP
- House Republicans on Monday released a draft of the huge tax bill that Trump wants Congress to pass.
- Included in the draft is a pilot program for "MAGA accounts," essentially savings accounts for kids.
- Republican Sen. Ted Cruz of Texas has been a strong proponent of the idea.
The "big, beautiful bill" that aligns with President Donald Trump's broader economic agenda and was unveiled by House Republicans on Monday includes a so-called "MAGA" savings accounts for kids.
Within the bill's draft is the creation of "Money account for growth and advancement" accounts, or "MAGA accounts," laying out a pilot program to launch the accounts with $1,000 each.
GOP Sen. Ted Cruz of Texas recently talked about the plan with Semafor after he pushed the idea to his fellow Republicans as they attended a party retreat earlier this month.
"The case I made to my colleagues is: We should ask ourselves in this bill, what will be the legacy that people will remember and talk about 10 years from now, 20, 30, 40 years from now?" Cruz said at the time.
Unlike previous Democratic-led proposals, Cruz said his plan aims to encourage more Americans to invest in the stock market. He credited Brad Gerstner, CEO of the Altimeter Capital hedge fund, with helping create the idea.
"A 10-year-old can pull out an app on his phone and say, 'Hey, look, I own $50 worth of Apple, I own $75 worth of Boeing, I own $30 of McDonald's, I go to McDonald's, I'm an owner of McDonald's,'" Cruz told CNBC. "That changes a young person's attitude, I think when they are a stakeholder in our free market."
The high-profile conservative and onetime Republican presidential candidate also told Semafor that such accounts could "begin the journey of savings" for many Americans, with those individuals reaping the advantages of compound interest years later.
In the House bill, the item is listed as the "MAGA Accounts Contribution Pilot Program." The plan would give parents with a qualifying child a "one-time credit of $1,000" that'd be payable into the child's account.
To be eligible for the program, the child must be a US citizen "at birth," possess a Social Security number, and have a birthdate after December 31, 2024, and prior to January 1, 2029.
In the House bill's draft, the MAGA accounts are specified as being "exempt from taxation."
The program is reminiscent of the "baby bonds" proposal from Democratic Sen. Cory Booker of New Jersey, who pitched the idea of granting $1,000 to US babies in savings accounts in order to help create a financial foothold for them early in life. Booker advanced the idea as part of his 2020 presidential campaign.
Alongside Booker, Democratic Rep. Ayanna Pressley of Massachusetts was also a strong advocate of the "baby bonds" plan, which was pitched as a way to close the racial wealth gap.
Unlike Cruz's proposal, Booker's plan also had hard cutoffs for wealthier families.