Government-seeded accounts could test Trump's 'communists' claim

WASHINGTON — President Donald Trump’s recent attacks on democratic socialists who have won Democratic Party primaries could clash with his idea of creating investment accounts for American adults.

The administration this week already formally launched its Trump Accounts initiative for children, which includes a one-time government contribution of $1,000 for each eligible child. The president, during a Monday Oval Office event marking the start of that program, floated what would be another costly government-funded program.

“You haven’t seen anything yet. Between individual contributions and the seed funds, $800 million in new capital will be invested in the stock market for America’s children this week. And I also think that we’re going to be putting numbers in the budget, which will be really spectacular, because it’s really not costing us anything,” Trump said as a group of children looked on sitting on the Oval Office floor nearby.

“We’re giving this money to children so they can have a good life. Very early on, they can have a good life. And we’re going to be doing, also, something we’re working on later on and it’ll be also, I think, very popular and I guess the best definition is, they have a plan in Australia, which people really like.

“It’s really worked out very well, incredibly well and very respected. And we’re going to be talking about that with Congress and see if we can implement it. And that would be more for grown-ups as opposed to children, but it’s something that’s going to be great, I think, if we can get it done — and we’re going to try very hard,” he said, previewing what would be, for any president, a possible rare legislative ask so close to a midterm election.

Trump appeared to be referring to the Australian retirement system, which is composed of three main pillars, two of which do most of the heavy lifting. The first is a means-tested government pension available to eligible retirees who meet income and asset limits.

The second is known as “superannuation,” a mandatory retirement savings program created in 1992 that requires employers to contribute 12% of a worker’s wages into a tax-advantaged investment account. It covers most workers between the ages of 18 and 70, and employees can boost their balances through voluntary “salary sacrifice” contributions, which are currently capped at $30,000 annually. Withdrawals are tightly restricted until retirement.

Former Australian Prime Minister Paul Keating, a Labor Party member, has called the “superannuation” program “the envy of the developed world.”

Trump administration officials have said the Trump Accounts for children were designed to grow over time through private investment, with families and others able to make additional contributions that will be subject to annual limits.

The president and other supporters argue the accounts should encourage long-term saving and wealth building from birth, while critics question the cost, distributional effects and whether the funds would meaningfully reduce wealth inequality compared with other child-focused policies.

Still, taxpayer funds collected by the federal government already are seeding the youth accounts. Trump’s mention of seeking lawmakers’ approval — with their collective constitutional power of the purse — suggests the same would be true for his envisioned adult accounts.

Proposing what would be, by definition, a major government payout to American adults appears to clash with Trump’s recent daily attacks on the list of democratic socialists who have won primaries and could be headed to Congress in January.

Asked how the envisioned adult accounts might work, and just what Trump could ask Congress to approve, a White House official directed a reporter to an executive order the president signed on April 30 endorsing “high-quality, low-cost individual retirement accounts.”

That order directed administration officials to “prepare legislative recommendations to codify the policy set forth in this order so that workers lacking access to employer-provided retirement plans, including workers in small businesses, part‑time workers, independent contractors, and self-employed workers, have access to a retirement option with low fees, eligibility for the Federal Saver’s Match or other matching contributions, diversified index‑based investment options, automatic portfolio choices, and portability.”

Trump on Wednesday, during a NATO summit-wrapping press conference in Ankara, Turkey, noted that he was “No. 1 on TikTok” because “all I do is talk about communism.”

“That means that my word’s getting out about how great our country is, how successful our country is, and how bad communism is, and how bad these lunatics are that are running for election that don’t sound good, don’t think good and don’t look good,” he said of the democratic socialist candidates. “These are communists that are running and they don’t want God; they don’t want successful things to happen for our country, they don’t want to have a successful country. I think they’re sort of crazy.”

‘Not in alignment’

The president’s recent pivot to the communist claims when discussing Democrats were rebuffed by the independent fact-checking organization PolitiFact, which wrote on X: “Socialists and communists are not in alignment with mainstream Democrats.”

Still, Trump debuted the communism-based attack lines last month.

“Anybody who wants a house, don’t worry about it, just pick the house you want. Everybody gets free food. Everything is free from this point forward. ... The problem is, after two or three years, the country is a disaster area,” Trump told the annual Faith & Freedom Coalition’s conference in Washington, D.C., on June 26. “The country fails — they always do. ... There will be no food. There will be no housing.”

Twenty-nine percent of U.S. adult citizens said they would vote for a democratic socialist candidate, while 45% said they would not, according to a YouGov-The Economist poll conducted June 26-29. Another 26% said they were not sure.

One former Democratic governor this week suggested Trump and Republicans were missing the point.

“It’s more anti-incumbent than pro-socialism,” James Blanchard, a Democrat who was Michigan’s chief executive from 1983 through 1991, told The Washington Post. “They want fighters. They want change, and they think incumbents in Congress have been too complacent.”

Trump and his congressional allies have shown no concerns about pushing the communist attack lines while he mulls a government-funded adult investment program.

“It’s just shocking to see the people that are in the Democrat Party that are the voice now of the Democrat Party — these are radical Marxists and they’re certainly left of socialism,” Kansas GOP Sen. Roger Marshall told Kansas City’s KCMO radio on Wednesday. “I’m not going to call them communists today, but they’re certainly Marxist.

“They want to destroy everything. They hate America. They want to end capitalism. The typical socialist just wants to regulate socialism, and then redistribute the money — higher taxes, and more social programs — but these people want to abolish capitalism,” he contended. “They’re the tail wagging the dog of the Democrat Party — this is who Chuck Schumer is kowtowing to right now, is his far-left people in his party.”