At a House Financial Services Committee hearing on September 2, Rep. Ayanna Pressley of Massachusetts took aim at Trump Accounts, the new investment accounts for children created by last year’s tax and spending law. According to her office’s summary of the hearing, she argued the accounts fail to close the racial wealth gap and pitched her own baby bonds proposal instead. Meanwhile, millions of parents are deciding right now whether to sign up.

Both things can be true at once. Our position is simple: if your child qualifies for Trump Accounts money, claim it. Then keep pushing for something better, because the program as designed will not narrow the distance between Black and white families, and there is a real risk it widens it.

What Trump Accounts Actually Offer

The details matter, so here they are. According to the IRS, U.S. citizen children with a valid Social Security number born between January 1, 2025 and December 31, 2028 can receive a one time $1,000 pilot contribution from the Treasury. Parents elect it by filing Form 4547, which can now be submitted through an IRS Individual Account online. The accounts began accepting contributions on July 4, 2026, and families can add up to $5,000 a year, with employers able to contribute up to $2,500 of that. A Chase guide for parents notes the money must sit in broad U.S. stock index funds with fees capped at 0.1 percent, and withdrawals are generally barred until the end of the year the child turns 17, after which traditional IRA rules apply.

There is also private money. Michael and Susan Dell pledged $6.25 billion to put $250 into the accounts of 25 million children age 10 and under who were born before 2025 and live in ZIP codes with a median income below $150,000.

Why Equal Deposits Will Not Close an Unequal Gap

The wealth gap is not a $1,000 problem. The Federal Reserve’s analysis of its Survey of Consumer Finances found the typical white family held $285,000 in wealth in 2022, compared with $44,900 for the typical Black family. A deposit that every eligible child receives in the same amount does not touch that difference. What grows these accounts over 18 years is what families add, and the families able to put in $5,000 a year are mostly the ones who already have a cushion.

A rough illustration makes the point. If $1,000 earned 7 percent a year, it would grow to about $3,400 by age 18. A family that also added $5,000 every year at the same return would end up with well over $170,000. Same program, same rules, wildly different outcomes. That is why economist William Darity told The American Prospect that when it comes to racial wealth inequality, the accounts “only can make things worse.”

Pressley raised other concerns at the hearing: families must opt in rather than being enrolled automatically, and she warned the accounts could penalize low income households on public benefits. Even the Chase guide acknowledges uncertainty about how the accounts will interact with college financial aid and government benefits. Families with the least room for error deserve clear answers before anyone encourages them to pour scarce dollars in.

The Best Case for Trump Accounts

Supporters have a fair argument, and we want to state it plainly. Universal programs tend to be durable, because a benefit every family receives is politically harder to cut than one aimed only at people with low incomes. For a household that has never owned a share of stock, an account that starts with $1,000, or $1,250 if the Dell gift applies, is a genuine first step into investing. Low fees and a simple index fund are better terms than many adults get in their own retirement plans. And if employers follow through with contributions, working parents could see real help.

We take that seriously, and it is exactly why we tell parents to sign up. But a policy can be worth using and still be the wrong tool for the job it is being sold to do. If the goal is closing the racial wealth gap, the design matters more than the branding.

What Targeted Looks Like: Connecticut’s Baby Bonds

We do not have to guess what a better design looks like. Connecticut already runs one. Under CT Baby Bonds, children whose births were covered by HUSKY, the state’s Medicaid program, on or after July 1, 2023 automatically have $3,200 invested on their behalf by the state treasurer. No forms and no opt in. Between ages 18 and 30, after completing a financial literacy course, they can claim the money to buy a home in Connecticut, start a business there, pay for education or job training, or save for retirement. The state projects the investment could grow to between $11,000 and $24,000.

That is the difference: automatic, and aimed at need. Pressley’s American Opportunity Accounts Act, which she first introduced with Sen. Cory Booker in 2019, applies the same logic nationally. Baby bonds are not reparations, and we have argued that local reparations programs are proving what targeted policy can do. But both rest on one idea: a gap built by policy has to be closed by policy aimed squarely at it.

What We Recommend for Your Family

Claim the $1,000 Now

If your child was born in 2025 or later and has a Social Security number, file IRS Form 4547 through your IRS Individual Account. The official Trump Accounts site also points parents to an app for managing the account. Doing nothing leaves free money on the table.

Check the Dell Gift for Older Kids

If you have children 10 or younger who were born before 2025, check whether your ZIP code qualifies for the $250 Dell contribution. It is deposited into a Trump Account, so the child needs one opened to receive it.

Protect Your Emergency Fund First

Money in these accounts is locked up for years. Before adding your own dollars, build a cash cushion in a federally insured account, and consider the options in our guide to moving your money to a Black-owned bank. If your household receives SNAP, Medicaid or SSI, ask a benefits counselor how contributions might be treated before making large ones. If college is the main goal, compare a 529 plan too.

Ask Your Employer

Employers can contribute up to $2,500 a year per employee. Ask your HR office whether your company offers a contribution, and whether it plans to.

Push for Automatic, Targeted Design

Use the House’s find your representative tool to reach your member of Congress. Ask a specific question: will they support automatic enrollment and larger deposits for children from families with the least wealth?

Free money is free money, and we want every eligible Black child to get it. But a $1,000 head start does little in a race where the typical white family begins with more than six times the wealth. Sign up, then keep asking for a policy built to close the gap rather than simply pose next to it.