Every US Child Will Now Be Enrolled at Birth
Treasury published rules Tuesday switching Trump Accounts from opt-in to automatic, creating accounts for more than 60 million additional children under 18 and adding roughly two million newborns a year without any parental action. The program had processed 5.6 million forms by the end of July against 73 million eligible children, a participation rate of 7.63%.
Per WSJ, Richard Rubin and Ashlea Ebeling report that officials had previously argued the law did not permit creating accounts for people who had not enrolled. They wrote Tuesday that they found a path to overcome those constraints, using a master group trust that can transact without obtaining the individual information investment managers are not legally permitted to receive. The accounts are administered through Robinhood and Bank of New York Mellon.
The case for the change is strong and the data supports it. Jin Huang, a social policy professor at Washington University in St. Louis, calls it the most important design change since the law passed, because assets start compounding without families needing to act. Participation was roughly flat across income bands, around 9.6% for families earning $1 to $15,000 and 4.8% for those above $500,000, which means the barrier was awareness rather than wealth. Two caveats survive. The $1,000 federal contribution for children born 2025 through 2028 still requires a specific election, and parents must claim an account before making their own contributions or accepting employer ones.
The rules carry a second change that received less attention. The law requires these accounts to hold only diversified, low-cost indexes. Treasury will now allow private donors to contribute appreciated individual stocks directly, reasoning that the accounts receive the shares rather than purchase them with account funds. The prohibition stands and the outcome it was written to prevent is now permitted. Treasury's stated rationale for auto-enrollment points the same direction, quoting stakeholders who said eligible donors prefer contributions to reach all children rather than only those whose parents know to opt in.
The stock provision is where the interests become visible. A donor gives appreciated shares to a charity, which passes them to Trump Accounts. The donor avoids capital gains tax, takes an income tax deduction and removes the asset from a taxable estate. Treasury says several donors are prepared to give at the scale of Michael Dell's $6.25 billion pledge but will not give cash, and concluded the benefit of those donations outweighs the added concentration risk. That is a defensible policy judgment, stated openly, and it is also a description of who the rule was written for.
Nina Olson, the former national taxpayer advocate now running the Center for Taxpayer Rights, put the objection cleanly. The index requirement exists for stability, and she asks what happens if someone donates a block of technology stocks into another dot-com style unwind and a child is left holding worthless shares. The rules require donated stock to be held five years before sale, which locks in the concentration rather than limiting it, and the holder has no ability to rebalance during that window.
There is a timing observation worth making without overstating it. Vanguard warned last week that new corporate bonds are increasingly a claim on the same AI investment cycle driving equity returns, and hyperscaler capital spending projections for this year now total $745 billion against a credit story that assumes operating cash flow triples. Appreciated technology stock is exactly what wealthy donors currently hold. A structure that channels it into accounts belonging to children who cannot sell for five years is being built at a moment when that is the concentrated position most people already own.
What to watch is the claiming process, which Tuesday's rules do not fully specify. Sixty million accounts that exist but are unclaimed, uncontributed to and possibly holding a single donated stock is a different program from the one announced in July.