Congress Can Do Better Than ‘MAGA Accounts’ 

Parents have much to like in the reconciliation bill currently under consideration in the U.S. House. The “One, Big Beautiful, Bill” proposes raising the Child Tax Credit to $2,500 for four years, the remainder of President Trump’s time in office. After that, the CTC would drop back to $2,000 but would be adjusted for inflation. That would be a big improvement for families that have been waiting on Congress to pass temporary CTC catch ups. 

However, we believe one new provision is a well-intentioned but misguided gimmick. The bill includes a proposal to establish “Money Account for Growth and Advancement”—or “MAGA” accounts. Parents will be given the opportunity of a tax-advantaged savings account–akin to a 529 savings plan. Parents can deposit a maximum of $5,000 per year in the account and must invest in an index fund or equivalent. Babies born during Trump’s term would also get a one-time deposit of $1,000 from the government. 

The money’s use is tightly constrained. At age 18, their child can access the sum to pay for college or trade school, start a business, or buy a home. They can also hold off under age 25 and take half the amount out in cash or wait until 30 and get the whole amount disbursed to them. 

As our thumbnail sketch shows, this has nothing to do with helping families when they need it most—in the early weeks and years of parenthood, when incomes are variable and expenses are high. This is a policy that aims to boost the amount of savings held by teenagers, which may or may not be a laudable goal, but is far from a targeted pro-family approach. Even the bill’s promoters talk as much about restoring faith in capitalism and combatting socialism as they do about supporting family life, suggesting these new accounts are better understood as a political gesture than a means of addressing parents’ needs. 

At a time when declining birth rates indicate how keenly parents feel the expenses and opportunity costs that come with having a child, MAGA accounts are an attempt to solve the wrong problem. Parents struggle with the choice of when or whether to have a child because of near-term financial pressures, not because of anticipated expenses of their child’s college education or first house. Congress might as well commit to carbon taxes as a fertility project, imagining that climate concerns are the primary obstacle to 20- and 30-somethings having children. 

A baby bonus is a bet on parents, not the stock market.

And on the level of pure politics, the proposed four-year pilot is bizarre. When that time comes to an end, it is hard to imagine there will be any constituency for renewal—aside from investment fund managers. At the end of Trump’s term, the first babies to benefit from the MAGA accounts will still be at least 14 years from accessing their money. Very few low-to-middle income parents will have the financial stability to max out their annual contribution to the accounts, turning them into, essentially, another way for rich parents to reduce their tax burden when handing money off to their kids. 

By contrast, baby bonuses—which we both support—would begin reaching parents soon after the president’s signature graced the final bill. Members of Congress could cut gauzy ads featuring parents who received upfront assistance upon the birth of a new child. They could point to parents newly able to afford diapers, take time off work, even commit to welcoming an unplanned pregnancy. Couples weighing whether or not to try for a baby would hear from friends, sisters, coworkers, from all walks of life, about the baby bonus that helped them settle their hospital bill.

A baby bonus is a bet on parents, not the stock market. Parents are still free to put their baby bonus in a tax-advantaged savings account if they think the best use of a marginal dollar is saving for college. But we expect many parents have more urgent needs in the first year of their baby’s life, which brings a significant income shock. It’s an odd time to plough money into locked-up savings accounts. Cash-in-hand allows families to weather the crisis of a NICU stay, a complicated delivery for Mom, or just the ability to take a few days off during the four-month or more sleep regression. 

And most importantly, baby bonuses would send a clear message about the joy of welcoming new life whenever it arrives. When deciding to have a child, parents shouldn’t feel that they need a plan for their baby’s entire future. Nor should there be a legal precedent that true financial freedom doesn’t truly begin until age 30. It’s the capstone model of family life that teaches young men and women to delay marriage and children until everything else in their life has been settled. And, far too often, it is that same capstone mentality that leads men and women to miss out on the marriages and children they hope for. 

The “One, Big, Beautiful Bill” does best when it empowers families to do their best for their children, as with the CTC provisions that directly impact parents’ pocketbooks. The MAGA accounts, however, are something closer to a gimmick—neither calibrated toward parents’ needs nor likely to engender respect for their sacrifices. As Congress refines this mammoth piece of legislation, it should prioritize investing in families in the present. 

Leah Libresco Sargeant is the author of Building the Benedict Option and runs Other Feminisms, a substack community. Patrick T. Brown (@PTBwrites) is a fellow at the Ethics and Public Policy Center, where he writes the weekly “Family Matters” newsletter. 

Editor's Note: The opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or views of the Institute for Family Studies.