01 Aug Will Trump privatize Social Security because of baby bonds?

Q. I’ve heard the new baby bonds will open a door to privatizing Social Security. I don’t get it. What does it mean?
— Confused

A. Let’s unpack this.

One provision of the so-called “Big Beautiful Bill” created a $1,000 account for babies who are born from Jan. 1, 2025 through Dec. 31, 2028.

The details, such as how the accounts will be set up, are murky, though the accounts are supposed to be invested in index funds that follow the S&P 500.

How is this linked to Social Security, or privatizing Social Security?

Treasury Secretary Scott Bessent, speaking at a Breitbart News event said the baby accounts could be “a back door for privatizing Social Security.”

As you can imagine, the financial press went wild with that one.

To put it in context, his consider his other statements, per The New York Times:

“Social Security is a defined benefit plan paid out. 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.”

But later, on X, he said more:

“Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments. This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money.”

Take it for what it’s worth. Privatizing Social Security has been debated for decades. We’re not going to try to guess if it will ever happen, so stay tuned.

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This story was originally published in August 2025.

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