WASHINGTON — Republican lawmakers made a last-minute change to the baby savings plans in their budget bill, changing the name from “MAGA accounts,” which stood for “Money Account for Growth and Advancement,” to “Trump accounts.” The initials, MAGA, are also ubiquitously linked with President Donald Trump's slogan “Make America Great Again.”

What You Need To Know

  • Republican lawmakers made a last-minute change to the baby savings plans in their budget bill, changing the name from “MAGA accounts,” which stood for “Money Account for Growth and Advancement,” to “Trump accounts” 

  • Under the plan, the federal government would seed $1,000 in an account for children born between 2025 and 2029, and the bill, if passed, would also establish a new “tax-advantaged account” available for children under the age of 8. 

  • The name change for the child savings accounts drew the ire of Democrats, who noted the modification and asked Republicans about the switch. 

  • Democrats noted that the idea originated by members of their own party —  Sen. Cory Booker, D.-N.J., and Rep. Ayanna Pressley, D.-Mass. — and had previously been floated as “Baby Bonds”

Under the plan, the federal government would seed $1,000 in an account for children born between 2025 and 2029. The bill also would establish a new “tax-advantaged account,” available for kids under the age of 8. 

Parents could contribute up to $5,000 per year into the accounts, and the balance would need to be invested in a diversified fund that tracks a U.S.-stock index.

The money could later be used for education and small-business expenses, as well for first-time buyers to purchase a home, the text of the House GOP’s bill — named the One Big Beautiful Bill Act — states. 

At the age of 18, account holders could take out 50% of the money for limited purposes such as school expenses, and at 25, they could access the full amount for limited uses. Restrictions on what the funds could be used for would be lifted when account holders reach the age of 30, according to a House Ways and Means document.

“This is a very pro-family piece of legislation,” White House press secretary Karoline Leavitt said Monday, explaining that the plan would be restricted to children who are U.S. citizens at birth and have one parent with a valid Social Security number. “When this tax provision becomes law, the child — if the parents seek to do this — will be set up with a savings account. Essentially it’s a 401(k) for a new baby.”

Earnings in the accounts would grow tax-deferred, and qualified withdrawals would be taxed at the long-term capital-gains rate.

The name change for the child savings accounts drew the ire of Democrats, who noted the modification Wednesday night and asked Republicans about the switch. 

“This is why you don’t hand something like this to people and rush into a markup,” Rep. Jim McGovern, D-Mass. said. “ If people could explain some of this stuff, that would be helpful.”

“All of that language was in the original bill, and they were creating this new trust for a child born in, I think, a four- or five-year period,” said Rep. Morgan Griffith, R-Va. “The wisdom was to change that to Trump trust.”

Democrats noted that the idea originated by members of their own party —  Sen. Cory Booker, D.-N.J., and Rep. Ayanna Pressley, D.-Mass. — and had previously been floated as “Baby Bonds.”

Colorado Rep. Joseph Neguse speculated that his Republican colleagues would be “screaming bloody murder” if Democrats named savings accounts in honor of former President Barack Obama.