Newborn babies in the United States will soon be gifted with $1,000 under a new bill by Donald Trump aimed at encouraging marriage and increasing birthrates.
The House of Representatives on Thursday narrowly approved the president’s One Big Beautiful Bill Act, including the introduction of a new savings account for children born between 2025 and 2028, by 215 votes to 214.
However, the final version of the bill — which extends Mr Trump's 2017 tax cuts for another decade while slashing public welfare programmes and increasing child credits — could still face pushback when it reaches the Senate.
Originally labelled the “Money Accounts for Growth and Advancement” or “MAGA Accounts”, the initiative has now been rebranded simply as a “Trump Account”.
Under the proposal, children will be offered a one-time deposit of $1,000 from the US Treasury into an index fund.
Parents can contribute up to $5,000 annually into the accounts — and if they fail to open one, the federal government will do it for them.
The money accumulated over time can then be used to pay for university tuition, a deposit on a house or starting a business.
There are no income requirements and everyone is eligible, as long as the child is a US citizen and both parents or carers have Social Security numbers.
Texas Senator Ted Cruz, who spearheaded the bill, said the funds give children “the miracle of compound growth, the ability to accumulate wealth, which is transformational”.
Unlike pre-existing 529 college savings plans, which are used to cover education expenses such as apprenticeships, the “Trump Account” has a tax incentive to get a kickstart on saving.
This is the most significant piece of legislation that will ever be signed in the history of our country
“This isn’t all that different from the tax treatment you would get from a typical brokerage account,” Sam Taube, of personal finance firm NerdWallet, told CNBC.
Mr Trump took to Truth Social to cheer the House’s passage of the bill, calling it the “most significant piece of legislation that will ever be signed in the history of our country”.
Earlier this week, Mr Trump threatened Republicans who rejected the bill, which he claimed was the “ultimate betrayal”, would be “knocked out” in the upcoming 2026 midterms elections.
Two GOP representatives voted “No” during the crunch vote, Warren Davidson of Ohio and Thomas Massie of Kentucky.
The fertility rate in the US hit a record low of 1.64 expected births per a woman's lifetime in 2020, according to the National Center for Health Statistics.
