Sen. Ted Cruz (R-TX) has openly linked the creation of Trump accounts to a broader effort to reform Social Security through privatization, a politically sensitive topic that has long been avoided by lawmakers. During a panel at the Milken Institute’s Global Summit, Cruz acknowledged that the Trump accounts, established under last year’s One Big Beautiful Bill Act, are a precursor to personal Social Security accounts.
"Here’s the dirty little secret: Trump accounts are Social Security personal accounts," Cruz said. The accounts, which allow parents to open tax-advantaged savings for children under 18, were designed to mimic Australia’s superannuation program, shifting retirement savings away from public pensions and into individual investment funds.
"How did we get it done this time? Because we gave the money to babies and so the old people didn’t get pissed," Cruz remarked.
Cruz argued that as parents witness the growth of their children’s Trump accounts—projected to reach up to $1.9 million by age 28—they will push for similar personal accounts for their own payroll taxes. This strategy aims to gradually reduce reliance on Social Security, which faces insolvency by 2034 if no reforms are enacted.
Despite Cruz’s vision, critics warn that diverting payroll taxes to individual accounts could jeopardize current Social Security benefits, which are funded by today’s workers. President Trump has vowed not to touch Social Security benefits, but the White House has described Trump accounts as a way to supplement retirement savings.
For now, Trump accounts are likely to become a standard workplace benefit, with employers matching contributions. "Relatively speaking, it’s a pretty inexpensive employee benefit," Cruz noted. "But the benefit over time is massive."