Treasury Secretary Scott Bessent has said new investment savings accounts for young Americans could help privatize Social Security.
Speaking at an event hosted by right-wing news outlet Breitbart on Wednesday, Bessent described the president’s new “Trump accounts”—which offer a one-time $1,000 government contribution paid into a special account—as a “backdoor for privatizing Social Security.”
Social Security—often referred to as the “third rail” of American politics due to its fundamental importance—is a federally administered social insurance system that pays out benefits, mostly for retired and disabled Americans.
The comments have sparked fierce reaction from Social Security advocacy groups and Democratic lawmakers.
What Did Bessent Say?
“But in a way, it is a backdoor for privatizing Social Security,” Bessent said at the event. “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.”
He later clarified in a post on X that the new accounts “are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments.” He added: “This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money.”
A Treasury Department spokesperson told Newsweek via email: “Trump Accounts are an additive government program that work in conjunction with Social Security to broaden and increase the savings and wealth of Americans. Social Security is a critical safety net for Americans and always will be. This Administration has not just fought tirelessly for seniors but is also fighting for the next generation. Under President Trump’s leadership, more Americans will reap the benefits of our booming economy than ever before.”
U.S. Treasury Secretary Scott Bessent speaks during a ceremony for U.S. National Day at the World Expo 2025 on July 19, 2025, in Osaka, Japan.
U.S. Treasury Secretary Scott Bessent speaks during a ceremony for U.S. National Day at the World Expo 2025 on July 19, 2025, in Osaka, Japan.
Tomohiro Ohsumi/GETTY
What Are Trump Accounts?
The accounts, which are seeded with a $1,000 contribution from the federal government, let parents of children born during 2025 through 2028 contribute up to $5,000 annually for each child, with additional contributions allowed from employers. The money must be invested in portfolios linked to U.S. stock indexes, following a structure similar to individual retirement accounts.
Withdrawals are penalty-free after age 59½, or earlier if used to pay for college costs or a first home purchase. They were signed into law as part of the One Big Beautiful Bill Act, President Donald Trump‘s sweeping domestic spending legislation.
Reaction
There has been no shortage of reaction to Bessent’s comments, particularly from groups that advocate for the preservation of Social Security benefits and retired and/or disabled Americans.
“That is a terrible idea,” said Nancy Altman, president of Social Security Works. “Unlike private savings, Social Security is a guaranteed earned benefit that you can’t outlive. It has stood strong through wars, recessions, and pandemics. The American people have a message for Trump and Bessent: Keep Wall Street’s hands off our Social Security!”
“President Trump should promptly denounce Treasury Secretary Bessent’s promotion of a ‘backdoor’ way to privatize Social Security,” Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, adding that the American people “do not want their hard-earned Social Security benefits handed over to Wall Street.”
Democratic lawmakers also seized on Bessent’s comments.
“Like every Republican administration going back multiple generations, Trump and his billionaire cabinet want to privatize Social Security to give their Wall Street buddies a payday,” Senate Finance Committee ranking member Ron Wyden said. “This would be a disaster for seniors and for all Americans who will rely on Social Security for a dignified retirement, and it’s a guarantee that Republicans would follow up privatization with brutal cuts that would drive vulnerable people into destitution.”
Rhode Island Senator Jack Reed said on X that privatizing Social Security would turn it “from a dependable safety net to a risky profit center for moneyed special interests at the expense of everyday Americans.”
Trump Treasury Sec. Scott Bessent said the quiet part out loud: Trump-Republicans want to privatize Social Security, turning it from a dependable safety net to a risky profit center for moneyed special interests at the expense of everyday Americans.https://t.co/mp8qVtXjt2
— Senator Jack Reed (@SenJackReed) July 30, 2025