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WASHINGTON — U.S. Sen. Ted Cruz wants to give every American baby $1,000 — and he’s on course to get his way.

The inspiration came during a late night card game in April 2024 with professional poker player Phil Hellmuth, who told Cruz about Invest America, a group that promotes financial literacy in private investment. A few weeks later, Brad Gerstner, the group’s CEO, flew to the nation’s capital to meet with Cruz to pitch a federally facilitated savings account for every child in the U.S.

After their conversation, Cruz was hooked, he told The Texas Tribune in an interview this week. He saw the opportunity to both leverage compound interest for American children in the United States and educate them about American capitalism.

Initially filed as the “Invest America Act,” the measure has since been rebranded as “Trump accounts” and included in the GOP’s landmark “One Big Beautiful Bill” that has already passed the House. If signed into law, the measure would spend about $3 billion annually to seed investment accounts with a $1,000 deposit for every child born in the United States with a social security number to parents who also have a social security number.

This new tax-deferred savings account would be invested in an unspecified stock index fund that will accrue wealth as the child ages into adulthood. At 18 years old, the beneficiary could access half of the account — taxed at the long-term capital gains rate — for limited expenses, such as putting a down payment on a home, contributing to their education or starting a small business. At 25, they could access the entirety of the funds for those qualified purposes before having complete access when they turn 31.

The hope is that families will contribute to the account. Without additional investment, $1,000 grows to about $3,500 after 18 years, assuming an average market growth of 7% per year. That number would be more than $170,000 for a family that contributed the maximum $5,000 every year for 18 years, at the same growth rate.

Cruz has been the legislation’s chief architect and salesperson, promoting it to his colleagues during an all-day strategy session in the Library of Congress one year after the seminal poker game. Recalling that day to the Tribune in his Washington Senate office, Cruz said he stood up before his fellow senators and said, “There are lots of really big, important things in this bill, and I’m supportive of tax cuts and fiscal responsibility and all the things we’re trying to accomplish here.” But he had an eye on the bill’s legacy. “What will people remember that was in this bill?” he asked.

He sees these accounts as part of that legacy.

With declining trust among the American youth in the traditional free market capitalist system, Cruz said he thinks this legislation “makes every child a capitalist.” He imagines children checking their accounts and seeing themselves as an investor in the American market. “It gives every kid some skin in the game.”

Cruz said he personally lobbied President Donald Trump to get his buy in on the legislation, and it seems the Texas senator succeeded.

“This is a pro-family initiative that will help millions of Americans harness the strength of our economy to lift up the next generation,” Trump said at an event praising the measure earlier this month.

Cruz said Trump personally directed Speaker Mike Johnson to include this provision in the House’s version of the major tax and spending bill in the Ways and Means Committee before being approved by the whole lower chamber in May. On Monday, it was written into the Senate’s version through the upper chamber’s Finance Committee.

Trump’s backing all but guarantees the creation of these accounts as GOP members of Congress have been reluctant to buck the president on any of his legislative priorities.

Even with the fiscal hawks of the GOP looking for spending cuts to offset the tax breaks included in the reconciliation bill, Cruz is confident that the final bill on Trump’s desk will include these provisions.

“In the overall scheme of the bill, it’s a relatively small expenditure,” he said, adding that none of his Republican colleagues have pushed back on this specific provision within the bill.

The policy has also secured the approval of prominent Texas CEOs, including Michael Dell who has said his company, Dell Technologies, will contribute $1,000 to Trump accounts belonging to its employees’ children.

Other states have enshrined similar plans in state law — including Nevada, Rhode Island and Maine — wherein children receive $50 to $500 contributed to a college savings account. The United Kingdom, Canada and Singapore have also implemented similar savings accounts.

Tax and economic experts have mixed views about the American measure, though. Madeline Brown, a senior policy associate at the Urban Institute, praised the measure for its intent and reach, but expressed some reservations about its impact on low-income families.

“This program would likely widen gaps between our lowest and highest wealth families,” she said.

Not every family has room in their budget to contribute to a savings account, she said. As such, the $1,000 contribution from the federal government may be the only money added in the account for children from low-income backgrounds. Children from more affluent families, on the other hand, may max out the $5,000 yearly contribution limit, allowing them to accrue more wealth.

To fix this, Brown suggested the federal government contribute to the accounts on a regular basis and create a progressive structure wherein children of less wealthy families are given more than children from more well off families. This proposal mirrors one proposed by U.S. Rep. Ayanna Pressley, D-Massachusetts, and Sen. Cory Booker, D-New Jersey, commonly called “baby bonds.”

With the fear of emergency expenses looming large, some low-income families may not feel financially secure contributing to these accounts if they cannot liquidate the funds in a pinch, Alex Muresianu, a senior policy analyst at the Tax Foundation, told the Tribune.

In these cases, a universal savings account — which has more built-in flexibility on how the money can be spent — could be more beneficial, Muresianu said.

Cruz waved off the criticisms about equity and said the $1,000 seed money will benefit nearly every child born in the United States. He predicted that contributions to these accounts will become a new employee benefit, much like 401(k) benefits.

“Employees will value it, and so employers will offer it because it’s a good way to attract good, talented employees. That will dramatically expand the impact of this,” he said.

For lower-income children who may not have access to this capital, Cruz hopes philanthropy will fill in the gaps.

“The American free enterprise is the greatest engine for prosperity and for fighting poverty the world’s ever,” he said. “I think that legacy will be transformational.”

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