Trump’s Baby Bonus: Wall Street Optics Masquerading as Family Policy

A closer look at the OBBB reveals it’s less about helping families and more about feeding Wall Street, and it quietly guts the programs that actually work.

In classic Trumpian fashion, the “baby bonus” in the One Big Beautiful Bill (OBBB) is a glittery distraction. It promises a $1,000 investment account for every newborn; no application is needed, just a child and one parent with a Social Security number. Sounds simple. Feels generous. But dig beneath the surface, and the flaws scream louder than the headlines.

This is part of our ongoing coverage of the Budget Bill insanity. See this article for links to all of our past reporting on this topic:

ICYMI: The One Big Beautiful Budget Breakdown

No Application Needed, But Plenty of Unanswered Questions

The accounts are automatic, but the implications aren’t. If the child dies before age 18, the bill offers no clear guidance. Would grieving parents be expected to return the money, even if it lost value?

Even conservative-leaning voices are uneasy. Fox Business hosts noted it’s hard to imagine this account “influencing someone to have a baby” when it’s so restrictive and distant in impact.

7% Annual Return? A Political Illusion in This Economy

The policy is based on a 7% annual return, which ignores market volatility, inflation, and administrative fees. Even in ideal conditions, the final value—approximately $3,400—would be subject to taxation and restricted in use. Withdrawals not spent on government-approved purposes, such as education or home buying, are penalized.

Let’s break that down. In 2043, $3,400 won’t even cover a single semester at a public university. It’s not enough for a reliable used car, and it certainly won’t make a dent in housing, healthcare, or vocational training. For all its financial language, this account is functionally symbolic.

Families are also permitted to contribute up to $5,000 annually, but the vast majority who might actually need help can’t afford that. Meanwhile, families who already have access to 529s, trusts, and investment vehicles can enjoy far greater upside and fewer restrictions from existing programs.

As Darrick Hamilton, the economist who originally designed baby bonds, puts it: “It is upside down … It’s going to enhance inequality.”

Parental Financial Literacy: Assumed, Not Supported

There is no support for financial literacy in the OBBB. The program assumes parents, many of them navigating poverty, will manage long-term investments without guidance.

Shimica Gaskins, President of End Child Poverty CA, explains: “Having children have health care, having their families have access to SNAP and food are what we really need ... the country focused on.”

This program doesn’t empower families. It burdens them with complexity disguised as opportunity.

Cutting SNAP, Medicaid to Fund Wall Street: A Cruel Trade-Off

Even more damning, this “baby bonus” comes at the direct expense of SNAP and Medicaid, two of the most effective anti-poverty programs available.

• Every $1 in SNAP creates ~$1.70 in economic activity

• It supports jobs in retail, logistics, and agriculture

• It improves child health, development, and educational outcomes

Yet these are being cut to fund a restricted, long-term, low-yield investment account.

And these cuts hit hardest where they always do—single mothers, rural families, and communities of color. These are the families least likely to benefit from Wall Street’s largesse and most vulnerable to harm when safety nets are yanked away.

As Eve Valdez, child advocate and former foster youth, notes: “Accounts for newborn children that cannot be accessed for 18 years mean little to families struggling to meet basic needs today.”

What Real Experts Recommend

True baby bond models, such as those proposed by the Urban Institute and the Institute on Race, Power, and Political Economy, target low-wealth families with scaled contributions, recurring funding, and integrated financial education.

A more impactful investment would be to spend that $1,000 on the pregnancy itself.

• That could cover multiple prenatal visits, basic lab work, and access to a doula.

• It can reduce the risk of low birth weight, maternal death, and developmental delays.

• It delivers real-world benefits now, not speculative gains two decades later.

To be clear, this would be in addition to maintaining and possibly even expanding SNAP, Medicaid, and other proven programs.

Even Vox, in its cautious optimism about pronatalist policies, calls out the shallowness: “Policies promoting financial stability, paid leave, and childcare … are more beneficial for children’s well‑being than symbolic pronatalist strategies.”

We’ve previously explored how GOP pronatalist rhetoric is hollow here:

Note: This article is more than 45 days old and now lives in the archive. Become a paid subscriber for the full 650+ article archive, exclusive content, and occasional early access.

If Republicans Were Really Pro-Life...

This Isn’t Equity. It’s Optics

This is policy by press release. It sunsets in December 2028, just in time to score headlines but too short to serve real families. It assumes equality in a deeply unequal society, benefits the already privileged, and quietly dismantles programs that work.

If your child dies before turning 18? You may lose the account entirely. There’s no provision to use funds for funeral expenses. No dignity in death. No flexibility in grief.

A Scam Dressed as Support

Trump’s “baby bonus” is not a policy. It’s a Wall Street marketing scheme sold as pro-family aid. It gives families a delayed, restricted IOU, then yanks away the real help they rely on today.

If this is what the GOP means by “family values,” America’s working families should demand better, and demand it now.

Take Action: Don’t Let Wall Street Write Family Policy

If this enrages you—and it should—don’t stop at reading. Call your representatives. Speak up. Organize.

Congressional Switchboard: 202-224-3121
Ask to be connected to your Senator or House Representative.

Sample Script:

“Hi, my name is [Your Name], and I’m a constituent. I’m calling to urge [Senator/Representative] to vote against the OBBB Budget bill and any legislation that cuts SNAP, Medicaid, or other essential safety net programs to fund restrictive, inequitable savings accounts.

If Congress wants to support families, it should expand the Child Tax Credit, fund prenatal care, and support grassroots anti-poverty efforts, not Wall Street gimmicks. Thank you.”

Support What Actually Works

If you want to back real family policy, consider donating to or volunteering with:

• End Child Poverty CA

• The Center for Budget and Policy Priorities

• Feeding America

• National Diaper Bank Network

These groups offer real-time, life-saving aid, not delayed, taxed, and restricted IOUs.

Bibliography:

• Boak, Josh. “Can $1,000 at Birth Change a Child’s Future? A Republican Proposal Aims to Find Out.” AP News, June 9, 2025.

• Darrick Hamilton and Ayanna Pressley. “‘Trump Accounts’ Will Save Kids? Republicans Can’t Be Serious.” Washington Post, June 11, 2025.

• Darrick Hamilton (@DarrickHamilton). X post. “baby bonds … likely inflate asset prices and be ‘inequality enhancing.’” MarketWatch interview excerpt.

• “Supplemental Nutrition Assistance Program,” Wikipedia, last modified June 5, 2025.

• “Positive Effect of SNAP Benefits on Participants and Communities.” Food Research & Action Center, accessed June 2025.

• “SNAP Benefit Boost in 2009 Recovery Act Provided Economic Stimulus and Reduced Hardship.” Center on Budget and Policy Priorities, 2015.

• “Can $1,000 at Birth Change a Child’s Future? A Republican Proposal Aims to Find Out.” US News & World Report, June 9, 2025.

• “Quantifying the Impact of SNAP Benefits on the U.S. Economy and Jobs.” USDA Economic Research Service, July 2019.

• “Vermont Becomes Latest State to Introduce Baby Bonds Legislation.” 2024. Spotlight on Poverty, March 27.

• “The State of Baby Bonds: Scoping Opportunities for Economic Equality.” Urban Institute, 2023.

• “Baby bonds.” Wikipedia. Last modified June 2025.