(WASHINGTON) — Treasury Secretary Scott Bessent is trying to walk back his suggestion that the so-called Trump savings accounts for newborns could be a “back door” to start privatizing Social Security.
Bessent made the comments in an interview with Breitbart while he was speaking at length about the importance of financial literacy.
“But in a way, it is a back door for privatizing Social Security,” Bessent said.
In a social media post on Wednesday evening, Bessent sought to clarify his remarks.
“Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments,” Bessent wrote on X. “This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money.”
The “Trump Savings Accounts” were part of his megabill agenda narrowly passed by congressional Republicans earlier this month. The policy will deposit $1,000 into a tax-deferred, low-cost index fund account that will track the overall stock market for each newborn.
Additional contributions can go up to $5,000 annually. When the children reach adulthood, they can access funds to cover expenses such as college or a down payment on a home.
If a child is born after December 31, children under the age of 18 will have one thousand dollars put in their accounts for investment purposes.
The program is a new initiative to promote financial literacy among Americans.
“And, you know, people can put in up to certain amounts every year for their child, and they can invest that stuff in the market, and they can learn how to do this,” Bessent said in his interview with Breitbart.
When asked if companies matching would be a good thing, Bessent responded positively, saying it would be a “great thing.”
“At the end of the day, I’m not sure when the distribution level date should be. Whether should it be 30 and you can buy a house? Should it be 60? But in a way, it is a back door for privatizing Social Security,” Bessent said. “Social Security is a defined benefit plan paid out to the extent that if all of a sudden, these accounts grow and you have hundreds of thousands of dollars for your retirement, then that’s a game changer, too.”
Several Democrats quickly criticized Bessent’s comments.
Senate Minority Leader Chuck Schumer, a New York Democrat, slammed the treasury secretary in floor remarks on Thursday.
“Now, of course, Secretary Bessent had rushed to Twitter later to do a little cleanup, but the truth came out, the real truth,” Schumer said. “Actions speak louder than words, and the actions Donald Trump and his gang are taking against Social Security speaks volumes.”
“Well, Republicans said the quiet part out loud: They want to ‘privatize Social Security.’ Your money. Your benefits. Sold to the highest bidder. So much for standing with seniors,” Rep. Katherine Clark, the Democratic whip, wrote on X on Wednesday.
“Today the Treasury Secretary said the quiet part out loud: Republicans’ ultimate goal is to privatize Social Security, and there isn’t a backdoor they won’t try to make Wall Street’s dream a reality,” Rep. Richard Neal, the top Democrat the House Ways and Means Committee, said in a statement on Wednesday. “For everyone else though, it’s yet another warning sign that they cannot be trusted to safeguard the program millions rely on and have paid into over a lifetime of work.”
AARP, an interest group that focusing on issues affecting those 50 and older in the U.S., also pushed back on Bessent.
“AARP condemns Treasury Secretary Scott Bessent’s endorsement of a “backdoor” to Social Security privatization. We have fought any and all efforts to privatize Social Security, and we will continue to,” said AARP Senior Vice President of Campaigns John Hishta. “President Trump has emphasized many times that Social Security ‘won’t be touched,’ and that he is ‘not going to touch Social Security.’ This must include any and all forms of ‘privatization.'”
ABC News’ Alexandra Hutzler contributed to this report.
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