By Jasper Ward
WASHINGTON (Reuters) -U.S. Treasury Secretary Scott Bessent on Wednesday likened new savings accounts in a bill President Donald Trump this month signed into law to “a backdoor for privatizing Social Security,” speaking at an event sponsored by Breitbart.
The accounts, which were part of Trump’s sweeping tax-cut and spending bill, are meant to encourage new parents by offering a one-time $1,000 government contribution. According to the White House, the accounts will track a stock index and allow for additional private contributions of up to $5,000 per year.
Bessent said some details, including distribution dates and what funds could be accessed for, still needed to be worked out.
“But in a way, it is a backdoor for privatizing Social Security,” Bessent said. “Like, Social Security is a defined benefit plan paid out that – to the extent that if all of a sudden these accounts grow, and you have in the hundreds of thousands of dollars for your retirement – then that’s a game changer too.”
The Social Security administration did not immediately comment.
Social Security was launched in the 1930s as a federally administered system of social insurance and as a retirement program for U.S. citizens and some non-citizens.
The program is due to run short of funds to pay full benefits in 2033, its annual trustees’ report said in June.
U.S. Senator Ron Wyden, the top Democrat on the Senate Finance Committee which oversees the agency, expressed concern over Bessent’s remarks and accused the Trump administration of wanting to privatize Social Security.
The Trump administration has not indicated a move towards doing so.
In a post on X on Wednesday afternoon, Bessent said the “Trump Baby Accounts” will supplement Social Security’s guaranteed payments. He said the Trump administration is committed to protecting Social Security.
(Reporting by Jasper Ward; Editing by Scott Malone and Lincoln Feast.)
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