Treasury Secretary Scott Bessent hailed the president’s new investment accounts as a “backdoor for privatizing Social Security.”
The Republicans’ “Big Beautiful” budget bill created Trump accounts—a new type of tax-deferred investment account that allows parents to contribute up to $5,000 each year on behalf of their children.
“In a way, it is a backdoor for privatizing Social Security,” Bessent said at a Breitbart event in Washington, Politico reported. “If, all of a sudden, these accounts grow and you have in the hundreds of thousands of dollars for your retirement, that’s a game-changer, too.”
The funds must be invested in portfolios tied to U.S. stock indexes and are structured similarly to individual retirement accounts. The beneficiaries can make penalty-free withdrawals after age 59 and six months, or earlier for college expenses or first-time home purchases.
Despite President Trump’s promises not to touch Social Security, experts have warned for months that the program was already unofficially on the path to privatization.
Experts have warned that changes to the Social Security Administration introduced earlier this year by DOGE—then headed by billionaire Elon Musk—had unofficially put the agency on the path to privatization. Allison Robbert/Getty Images
Many of the changes brought about by the cost-cutting task force DOGE—formerly headed by Elon Musk—threaten Social Security’s future as a government entity, WarketWatch reported earlier this year.
Democrats quickly jumped on Bessent’s remarks as evidence that the Trump administration has been planning to move toward privatization all along.
“Bessent actually slipped and told the truth: Donald Trump and his government want to privatize Social Security,” Senate Minority Leader Chuck Schumer said in a floor speech.
Richard Neal, the top Democrat on the House tax-writing committee, told Politico in a statement that Bessent had “said the quiet part out loud: Republicans’ ultimate goal is to privatize Social Security, and there isn’t a backdoor they won’t try to make Wall Street’s dream a reality.”
Later on Wednesday, Bessent attempted to clarify his remarks in a statement on X.
Senate Minority Leader Charles Schumer accused Bessent of “slipping and telling the truth” about the administration’s plans to privatize Social Security. Chip Somodevilla/Getty Images
“Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments,” he wrote. “This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money.”
Notably, his statement did not say that Social Security would continue as a government program—just that it would continue.
A Treasury spokesperson offered a similar statement to Politico: “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.”
The Daily Beast has reached out to the White House and Treasury Department for comment.