Sen. Ted Cruz wants to give Americans $1K at birth to invest
WASHINGTON - Sen. Ted Cruz wants American children to be given $1,000 to invest from the federal government at birth.
The Invest America Act would put $1,000 from the government in an index fund that tracks the S&P 500.
Additional contributions of up to $5,000 could be made annually, and the money would be tax-deferred. Money could be withdrawn after the child turns 18 and would be taxed at the capital gains rate.
What they're saying:
"The Invest America Act will trigger fundamental and transformative changes for the financial security and personal freedoms of American citizens for generations," Cruz said. "Every child in America will have private investment accounts that will compound over their lives, enhancing the prosperity and economic participation of the vast majority of Americans. When people years from now talk about the changes created by Republican efforts this Congress, this is one of the landmark achievements they will talk about."
How many babies are born in the U.S. each year
US birth rates have seen a steady decline over the past decade, according to numbers from the Centers for Disease Control and Prevention.
By the numbers:
Preliminary data from 2024 shows just over 3.6 million children were born last year. The number was slightly up from 2023's 3.596 million births. Both numbers are still way off of 2014's nearly 4 million births.
Based on 2024's numbers, an initial investment from the federal government into the accounts would cost around $3.6 billion dollars.
Money Accounts for Growth and Advancement
Cruz scored a big win for the idea when the program showed up in the US House's Ways and Means Committee write-up on tax cuts and budgets.
The program from the committee was renamed Money Accounts for Growth and Advancement or MAGA accounts.
According to the Ways and Means Committee, the accounts would be made available for children 8 years old and younger, but only children born between 2024 and 2028 would be eligible for the $1,000 seed money.
The Source: Information on the Invest America Act comes from Sen. Ted Cruz. Information about U.S. birthrates comes from the Centers for Disease Control and Prevention. Information on MAGA accounts comes from the House Ways and Means Committee.