As federal government adopts ‘Trump Accounts,’ WA treasurer promotes similar program

OLYMPIA – The recently passed “One Big Beautiful Bill” established a program designed to give children a leg up when they reach adulthood. It’s an idea similar to one that’s been proposed across the country, including in Washington, but has found limited support.

Under the federal program, babies born between Jan. 1 , 2025, and Dec. 31, 2028, will be eligible for a $1,000 deposit into a “Trump Account.” As the child ages, parents, states and charities can make donations into the account, which will grow with interest over time. Once the child turns 18, the money can be used to start a business, go to school or buy a home.

Estimates show that the fund could grow to $18,100 by someone’s 28th birthday even if no extra contributions are made.

Rep. Michael Baumgartner, a Republican from Spokane, said the provision is one of his favorite things Congress has passed this year.

“It’s a great measure to open up important new investment accounts, particularly for Americans who haven’t had that opportunity in the past,” Baumgartner said in an interview Friday. “When Americans can invest in responsible, long-term savings accounts, they can have some good piece of mind in retirement.”

Baumgartner said the program can serve as an entry way to encourage Americans to save and contribute more.

During a business roundtable event at the White House on Wednesday, President Donald Trump said the accounts were doing “very well.”

“It’s going to make some young people relatively very wealthy. And in some cases, they could really, they could really be off to a good start,” the president said. “Some people have had that advantage, and some people haven’t. But it really is a wonderful thing.”

Trump was joined by, among others, businessman and philanthropist Michael Dell, who announced last week that he and his wife, Susan, would donate $6.25 billion to the accounts. According to the White House, the donation will give an additional $250 to the first 25 million children born in ZIP codes with a median household income below $150,000 .

According to data from the U.S. Census Bureau, every ZIP code in Spokane County falls below the $150,000 household income threshold.

“I applaud Michael Dell and I think every American should celebrate this opportunity,” Baumgartner said. “There is this whole cadre of Americans that haven’t had the benefit of having an investment account, or maybe just have not had the education to do so.”

The creation of a Trump Account is similar to the concept of baby bonds, where children receive a publicly funded trust account at birth.

While he has proposed creating state-level baby bonds accounts in Washington, state Treasurer Mike Pellicciotti said in an interview last week he has “concerns about some of the motivation behind those Trump Accounts.”

“I’ve heard the Secretary of the Treasury talking about creating that as an alternative to Social Security and other types of government benefits,” Pellicciotti said. “That makes me nervous.”

In July, Treasury Secretary Scott Bessent said at an event that the accounts were a “backdoor for privatizing Social Security.” In a subsequent statement, Bessent appeared to walk back that description, writing in a social media post that the accounts would be an “additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments.”

Still, Pellicciotti said, “anytime that you can get money to working families and retirees, I do think that’s a good thing.”

“A federal system that allows for certain accounts to exist, where funds can be amplified through something like baby bonds is something that we will most certainly find ways to best serve the people of the state of Washington,” Pellicciotti said. “But I do have concerns related to the motivation related to what’s been presented through that.”

Currently, Connecticut is the only state that has fully implemented such a program. Connecticut’s legislation passed in 2021 and took effect in 2023.

California has established a pilot program for those who lost a caregiver to COVID-19 or had a long-term stay in the foster care system, though the distribution amount has not been determined.

According to Pellicciotti, other states have made progress on their programs.

“Yet, here we are in Washington state, falling behind,” Pellicciotti said.

The 2022 supplemental budget adopted by the Legislature established the Washington Future Fund committee, which studied wealth inequality and analyzed legal and economic issues related to the proposal. The committee found, among other things, that poverty is persistent and those who escape it are most likely to do so in their 20s or 30s.

Initially, the plan called for donating $3,200 for every child born under Apple Health, which is about 40,000 babies a year. The money would have been managed by the State Investment Board.

Ahead of the 2023 legislative session, Pellicciotti formally rolled out the proposal, with the initial investment increased to $4,000. If approved, the legislation would have established accounts for about half of the babies born in the state. According to a fiscal note attached to the legislation, the idea would have cost about $140 million a year to fund.

However, the idea did not pass either chamber and died in committee.

Earlier this year, Pellicciotti proposed scaled back legislation that would have established a pilot program to award 40 grants of $25,000 to eligible applicants to use for school, a home or starting a business. Participants would have been required to participate in evaluation interviews for the study and financial coaching sessions. An attached fiscal note showed that the idea would have cost about $1 million.

While the legislation received a hearing in the Senate Ways and Means Committee, it too died in committee.

“It’s been a foundational view that everyone should have economic opportunity at birth, that they should have the tools to economically thrive, and they should have the security to retire with dignity,” Pellicciotti said.

Pellicciotti pointed to the passage of the Washington Saves program in 2024 as a way the state increased financial safety among residents. According to Pellicciotti, more than 1.2 million Washingtonians will be eligible for the program.

“In terms of the tools to economically thrive, that’s why I’m putting forward this economic education bill,” Pellicciotti said, referencing his proposal to require financial education as a requirement to graduate from high school.”

Still, Pellicciotti said baby bonds would be the “most effective tool” to accomplish economic opportunity.

“And I’m not going to quit on that,” Pellicciotti said.