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Lt. Gov. Dan Patrick speaks at a press conference about Senate Bill 7 at the Texas Capitol on April 7, 2021. Credit: Evan L’Roy/The Texas Tribune

AUSTIN – A proposal by a top Texas lawmaker could add an extra $1,000 to the federal newborn savings initiative that’s been labeled “Trump Accounts.” 

Lt. Gov. Dan Patrick says he wants to go so far as to amend the Texas constitution to permanently spend $400 million in taxes annually to double the accounts of children born in the state.

Texas infant saving accounts

What we know:

Patrick proposed the “New Little Texan Savings Fund” with a post on X, formerly Twitter, Wednesday. 

The lieutenant governor said he was inspired by President Donald Trump’s federal savings program, which gained increased attention this week when Texas billionaires Michael and Susan Dell donated $6.25 billion to tack an extra $250 onto the accounts. 

One of Patrick’s top priorities for the 90th Texas Legislative Session in 2027 will be to pass a bill adding a $1,000 savings fund for each newborn in the state. This money would be invested in the S&P 500, Patrick said, and the accounts could be contributed to by their family. 

The program would cost about $400 million per year, Patrick estimates, or about 1 percent of the total state appropriations. 

Patrick says the Texas constitution will be amended to make the program permanent. 

Dan Patrick wants accounts doubled

What they’re saying:

“If I see a great idea from the President that helps Texans, my first question is always, “why not do it in Texas, too?” Patrick said in his X post.

“This is a great way to return money back to families and to teach the value of savings and compound interest to young Texans,” the lieutenant governor continued. 

What are ‘Trump Accounts’?

Big picture view:

“Trump Accounts,” a bill signed into law earlier this year, gives $1,000 to every newborn, so long as their parents open an account. 

That money is invested in the stock market by private firms, and the child can access the funds when they turn 18. The parents of older children can also open accounts, but they won’t get the $1,000 bonus.

Backers say it’s a way to bolster capitalism and help children from low-income households build wealth.

The new program gives the $1,000 bonus only to babies born during the calendar years of the Trump administration. 

Children born before 2025 won’t qualify for the $1,000 incentive, but parents can still open accounts for them as long as they’re under 18. In addition, parents can still invest up to $2,500 pretax for those kids.

The Source: Information in this report comes from Texas Lt. Gov. Dan Patrick on X. 

TexasMoney