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Skift
11-07-2025
- Business
- Skift
Brad Gerstner on 'Trump Accounts' and the Travel Leaders He Still Calls First
Brad Gerstner's Invest America, which turned into Trump Accounts, could be a game-changer for tens of millions of American kids. Altimeter Capital CEO and travel industry veteran Brad Gerstner opened custodial investment accounts for his two sons at birth — but it was his son Lincoln's question at the kitchen table that led to a national policy. "Well this doesn't seem fair," Lincoln said. "Why do we get these and what about the other kids?" Gerstner said that was the spark for the Invest America initiative and the creation of "Trump Accounts." Under the new law, every American under age 18 will be eligible to open a tax-deferred investment account starting around July 4, 2026, and those born after December 31, 2024 will get $1,000 in government seed funding. Several corporations, including Uber, Zillow, T-Mobile, Nvidia, Salesforce, and iHeartMedia, have committed to giving $2,500 to employees' kids as a tax-free benefit. "Of course, less than 5% of kids in America currently have [investment] accounts," Gerstner told Skift. "And not surprisingly, the kids who do have the accounts are kids whose parents are pretty affluent. And so I grew up poor in Indiana, in a poor town. I have a really strong belief that there's a massive unlocked potential in the country." The Travel Industry Created Ties That Bind Early in his career, Gerstner was co-CEO of National Leisure Group, which was a major cruise seller; he led a General Catalyst investment into Orbitz; was a prominent travel angel investor, and founded Room77. These days, with his Altimeter Capital investing billions of dollars in tech companies like Nvidia, Meta, Uber and Microsoft, Gerstner is a frequent CNBC guest and co-hosts the BG2Pod with Bill Gurley. Gerstner has been interviewed on stage at past Skift Global Forums. Although the travel industry isn't currently his focus, Gerstner still has deep ties, particularly with Zillow co-founder and Expedia founder Rich Barton, and Uber CEO Dara Khosrowshahi, who is also a former Expedia CEO. "I've worked on a lot of things over the years, and my first two calls are generally to Rich Barton and Dara," Gerstner said. "You forge friendships in the travel business 25 years ago, and we support each other. No questions asked. And because we trust one another, and if we're passionate about it, then we know, we've done the work. And those guys' early support [for Invest America] was monumental." Why Silicon Valley Gets Along With Trump Gerstner said that Silicon Valley's relatively warm relationship with President Trump has little to do with politics. "I think part of the reason that Silicon Valley has had some success with this president versus [former President] Biden isn't really about the political agenda as much as it is he's a business guy, and he kind of moves at an entrepreneurial speed," Gerstner said. "And there's not a bunch of layers." A case in point: A couple of months ago, Gerstner said he told Dell Technologies CEO Michael Dell – a member of the Invest America CEO Council – that "we need to get the president on board." Dell texted Trump, who texted right back and invited them to the White House to pitch it. The White House also held an Invest America Roundtable with Gerstner and prominent supporters in early June. The Trump Accounts Name The original idea was to call them Invest America Accounts, but the name "Trump Accounts" helped the legislation ultimately become law. And the idea received bipartisan support, Gerstner said, who added that several CEO supporters of Invest America are Democrats. He had previously tried to get then-President Biden to go for the idea but it didn't get traction. Gerstner said Congress would need to "re-up" the $1,000 per child government funding in 2028, which he doesn't think will be much of an issue. "We'll see what people call them after he's [Trump's] out of office," he said. 65 Million Kids The original plan was to include children up to age 10, but Gerstner said it expanded to include all Americans under age 18 – around 65 million will be eligible, he said. Newborns born as of January 1, 2025 get automatically enrolled and funded, but older kids have to sign up. Invest America, Gerstner said, will be working to ensure that as many kids sign up as possible. For those children who have accounts, but were born before January 1, 2025, anyone — parents, family, friends, and corporations — can contribute a maximum of $5,000 annually per child. Education Secretary Linda McMahon, he said, is an enthusiastic supporter and Gerstner would like to see sign-up materials included with other documents on the first day of school. "I absolutely believe this most important thing I've done in my career," he said. "But it's like when you start business, and moment that we just got funded. All right, so now we've got to go execute our asses off and make sure it lives up to its promise." Gerstner said he's committed to making the accounts as equitable and powerful as they can be. The investment accounts are "making every kid a capitalist, making every kid a true owner in the upside of America. We need to evolve the social contract to include the 70% who currently feel left out and left behind. And I think this is a powerful way to do it."
The Hill
29-06-2025
- Business
- The Hill
Trump Accounts are the savings solution America's parents need
Congress may soon deliver a little bundle of joy to expecting parents and parents-to-be. The House-passed 'One Big, Beautiful Bill Act' contains the seed of a new federal investment program that may blossom into opportunity and financial security for millions of American children in the future. Fiscal conservatives have reasons to get on board. President Trump has formally introduced his plan for the federal government to fund $1,000 in investment accounts for every child born over the next four years. The cash would be deposited into a private custodial account and grow tax-free until he or she reaches adulthood. Parents, churches, charities and employers can also contribute up to $5,000 a year to the account. At age 18, the young adult gains access to half of the funds to be used for college or skills training, to start a business, or even for a down payment on a home. Trump Accounts are a marked improvement from the baby bonuses floated last year. Most fundamentally, Trump Accounts reflect a shift in the purpose and outcomes of family-supporting policies. The downstream effects will be minor on the budget but major for the economy and society, such that these accounts should earn broad conservative support. This plan promotes saving as a virtue that every American can adopt from birth. Different from the yeoman's goal of turning around our declining birth rate, these investment accounts are future-focused. Trump Accounts would democratize investing through its inclusivity. Open to every U.S.-born child with parents who have Social Security numbers with work authorization, children of all income levels and stripes would have skin in the investment game. While about two out of three Americans currently own stock and retirement accounts, according to Gallup polling, they tend to be degree holders and higher earners. Only 38 percent of Hispanics, 52 percent of Blacks and 28 percent of those earning below $50,000 participate in the stock market. Trump Accounts would skyrocket market participation. Young Americans would also gain a lesson in financial stewardship. In a culture that thrives on living for the moment, a generation of children would reap the benefits of patience and delayed gratification. Many parents would rather a one-time $5,000 check or a tax refund bump. However, families are well cared for in Trump's big, beautiful bill. Lowered income tax rates are made permanent, and the doubled Child Tax Credit increased by $500 for the next few years. Additionally, 529 plans are expanded significantly to cover more out-of-pocket K-12 costs, on-the-job training and continuing education. Trump Accounts would complement 529 plans. Children from poor and working-class backgrounds with little means to invest in 529s would gain access to a government-funded seed account. Brad Gerstner of Invest America posited that, with just $750 of additional savings per year, these accounts would swell to $50,000 by age 18. By focusing on saving for the future, Trump Accounts blunt inflationary fears and shrink fiscal impacts. Vice President JD Vance proposed a $5,000 baby bonus as a candidate, which Trump supported. Based on the most recent data from the National Center for Health Statistics, there were about 3.6 million births in 2023. A $5,000 baby bonus would have cost roughly $18 billion a year, whereas Trump Accounts are not likely to exceed $3 billion annually. These accounts are also time-limited, from Jan. 1, 2025, to Jan. 1, 2029, although the accounts may be renewed. I sympathize with supporters of baby bonuses as a policy solution to reversing our declining fertility rates. Demographic changes of fewer babies and longer life expectancies are stressing our Social Security system. However, baby bonuses have been tried in other countries with mixed results at best. A few thousand dollars is not enough to lure willing adults to procreate. The cost of raising a child from birth to age 17 on average is about $297,000. Children are costly. I know; I have three of them. From cribs to diapers, prenatal vitamins to formula, and child care to sports teams, our expenses compound daily. I view Trump Accounts as a solution to a different problem: the affordability crisis. Young people feel priced out of generational milestones such as homeownership. Turning age 18 with meaningful savings would help younger people break into the housing market sooner. The funds could also serve as the capital to spur a new generation of entrepreneurs. When traditional bank loans are not an option for young or risky borrowers, funds from these Trump accounts could purchase tools and equipment, a vehicle, or supplies to get started with one's own endeavor. These future property owners and business owners will pay it forward through the fruits of their ingenuity and hard work. Some sort of family-supporting policy was guaranteed to be part of the big, beautiful bill. Investment accounts that spread the virtue of saving, democratize investing and promise future economic growth are a generational hand up. That is far better than a handout wrapped up in swaddling clothes. Patrice Onwuka is the director of Independent Women's Center for Economic Opportunity.
CNBC
11-06-2025
- Business
- CNBC
The pros and cons of a $1,000 baby bonus in 'Trump Accounts,' according to experts
President Donald Trump's proposal for a new savings account for children with a one-time deposit of $1,000 from the federal government just got an important stamp of approval. At the "Invest America" roundtable at the White House this week, several top CEOs, including Michael Dell and Goldman Sachs chief David Solomon, expressed support for "Trump Accounts," which are part of the landmark Republican-backed "big beautiful bill" moving through Congress. The executives committed to contributing to the accounts of their employees' children, and, in Dell's case, matching the government's seed money "dollar for dollar." Still, policy experts and financial advisors question whether the provision is the most effective way to save on behalf of your child. Under the House measure, Trump Accounts — previously known as "Money Accounts for Growth and Advancement" or "MAGA Accounts" — can later be used for education expenses or credentials, the down payment on a first home or as capital to start a small business. Earnings grow tax-deferred, and qualified withdrawals are taxed at the long-term capital-gains rate. More from Personal Finance:Trump's 'big beautiful' bill could curb low-income tax creditWhat a 'revenge tax' in Trump's spending bill means for investorsWhat's happening with unemployed Americans — in 5 charts Trump's massive tax and spending bill still faces a battle in the Senate, but if it passes as drafted, parents and others will be able to contribute up to $5,000 a year to a child's Trump Account. The balance would be invested in a diversified fund that tracks a U.S.-stock index. Sen. Ted Cruz, R-Texas, who spearheaded the effort, told CNBC in May that the accounts give children "the ability to accumulate wealth, which is transformational." "This will afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning," the White House also said in a statement Monday. Some experts say the biggest benefit of Trump Accounts is the seed money for all children born between Jan. 1, 2025, and Jan. 1, 2029, funded by the Department of the Treasury. There are no income requirements. To be eligible, the child must be a U.S. citizen and both parents must have Social Security numbers. Although some states, including Connecticut and Colorado, already offer a type of "baby bonds" program for parents, Trump Accounts — along with a bigger child tax credit proposed in the budget bill and potential employer-sponsored matching funds — "could certainly help a lot of families at a lot of different income levels," Sam Taube, NerdWallet's lead investing writer, recently told CNBC. Invested in a broad equity index fund for 20 years, a $1,000 government grant for newborns could grow to an average $8,000, according to a March report from the Milken Institute. "If the policy also permitted a tax-deductible match by employers of the children's parents, such initial matches would double an account's value," researchers wrote. Depositing $1,000 into an account "is a good idea, but with a critically important caveat," said Mark Higgins, senior vice president at Index Fund Advisors and author of "Investing in U.S. Financial History: Understanding the Past to Forecast the Future." With Trump Accounts, "the costs are the key," he said: "If it keeps adding to the deficit, it is not sustainable." (By some accounts, the program could cost more than $3 billion a year.) "The biggest challenge for this country right now is that we have lived beyond our means," he said. "Over the last 230 years, Congress has passed countless programs like this, which provide short-term benefits that are almost invariably dwarfed by the long-term costs." Universal savings accounts, which allow for more flexibility, would be a better proposal than the House provision, said Adam Michel, director of tax policy studies at the Cato Institute, a public policy think tank. Universal savings accounts have had bipartisan support going back as far as the Clinton administration, and without the initial deposit, would come a much lower cost. They have also been successfully implemented in other countries, including Canada and the United Kingdom, according to the Tax Foundation. Further, Trump Accounts are "overly restricted and needlessly complex," Michel said. "A simpler system is a better way to get people to save." With a universal savings account, individuals could contribute up to $10,000 of after-tax income a year and withdraw the funds tax-free at any time for any purpose, according to Michel. "It's the flexibility that entices people," he said. "Maybe you want to use that money to start or expand a business or buy a house or an investment property — let people choose what's best for their lives." Another alternative is a tapping 529 college savings plan, which nearly every state offers. These 529 plans have much higher contribution limits, earnings grow on a tax-advantaged basis, and when a child withdraws the money, it is tax-free if the funds are used for qualified education expenses. This year, individuals can gift up to $19,000 to a 529, or up to $38,000 if you're married and file taxes jointly, per child without those contributions counting toward your lifetime gift tax exemption. Although there are more limitations on what 529 funds can be applied to compared to Trump Accounts, restrictions have loosened in recent years to include continuing education classes, apprenticeship programs and student loan payments. "For most parents, like myself with teens, the 529 college savings plan is superior if you're focused on paying for higher education because of the federal tax-free growth," Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California, recently told CNBC. "Also, now, the 529 is becoming more flexible with its' ability to have unused funds rolled into a Roth IRA in the future for retirement," said Sun, a member of CNBC's Financial Advisor Council. As of 2024, families can roll over unused 529 funds to the account beneficiary's Roth individual retirement account, without triggering income taxes or penalties, so long as they meet certain requirements.
Int'l Business Times
10-06-2025
- Politics
- Int'l Business Times
Trump Suggests Greta Thunberg Attend 'Anger Management' After Activist Was Detained by Israeli Forces
President Donald Trump called Greta Thunberg an "angry person" and suggested that she needs to attend "anger management classes" after the young activist was detained by the Israeli Navy while attempting to reach the Gaza Strip. Trump made the comment while answering questions from reporters before an "Invest America" event at the White House on Monday. "Do you have a message for Greta Thunberg, and did she come up on your call with the prime minister today?" asked one reporter, referencing Trump's call with Israeli Prime Minister Benjamin Netanyahu earlier in the day. "Well, she's a strange person. She's a young, angry person. I don't know if it's real anger, it's hard to believe actually, but I saw what happened. She's certainly different. I think she has to go to an anger management class, that's my primary recommendation for her," the president said. "Was she kidnapped by Israel, as she says?" the reporter continued. "I think Israel has enough problems without kidnapping Greta Thunberg," Trump continued. Social media users quickly took to online platforms to express their shock and outrage at the 47th president's response to Thunberg's detention. "Greta: *bringing medical supplies and food to Gaza* trump: 'I think she needs to go to an anger management class,'" wrote one user on TikTok. "Being a humanitarian equals anger in his eyes," said another. "He's talking about someone taking aid to starving children by the way," another added. "Yes she is very different and strange to a narcissist. She has empathy and bravery for trying to help starving people," one user commented. Thunberg, 22, had been on her way to deliver humanitarian aid to Gaza when she and several other prominent activists were detained by the Israeli military while in international waters early on Monday. "If you see this video, we have been intercepted and kidnapped in international waters by the Israeli occupational force, or forces that support Israel," Thunberg said in a pre-recorded video which was then released by the Freedom Flotilla Coalition, who operated the boat carrying the activists. "The 'selfie yacht' of the 'celebrities' is safely making its way to the shores of Israel," the Israel Ministry of Foreign Affairs (MFA) said in a statement. "The passengers are expected to return to their home countries." Originally published on Latin Times
Economic Times
10-06-2025
- Business
- Economic Times
Trump's ‘Baby Investment Accounts': What you need to know
AP Under the plan, each eligible newborn would receive a one-time $1,000 contribution from the U.S. government, deposited into a mutual or index fund. A new proposal backed by US President Donald Trump would create $1,000 investment accounts for every American baby born between Jan. 1, 2025, and Dec. 31, 2028. Known unofficially as "Trump Accounts" or 'MAGA Accounts,' the program is part of a broader tax-cut package that recently passed the House and is now pending in the eligible newborn would receive a one-time $1,000 contribution from the federal government, invested in a stock market-linked mutual or index fund. Additional contributions of up to $5,000 annually could be made by parents, religious institutions, or private donors. Funds would become partially accessible at age 18 for education, job training, or buying a first home, with full access at age 30. Dell Technologies has already pledged to match the government's $1,000 contribution for newborns of its employees, should the proposal become law. Other business leaders — including CEOs from Uber, Goldman Sachs, and Robinhood — attended a recent 'Invest America' roundtable at the White House to discuss the the White House issued a press release claiming support from the industry leaders including Goldman Sachs CEO David Solomon, Uber CEO Dara Khosrowshahi, and Altimeter Capital CEO Brad Gerstner."Together with historic tax cuts, an increased child tax credit, higher wages, and monumental economic growth, the One Big Beautiful Bill will change the lives of middle-class families across America," the release added. However, despite high-profile support, the proposal faces opposition in the Senate, particularly from fiscal conservatives who are pushing for revisions. Critics argue the program lacks the tax advantages of existing savings options like 529 plans and may not offer the strongest long-term returns. What is the Trump baby investment account program? It's a proposed federal initiative that would provide every U.S.-born child between Jan. 1, 2025, and Dec. 31, 2028, with a $1,000 government-funded investment account, tied to the performance of the U.S. stock market. What are these accounts officially called? The accounts are part of the "Invest America" plan and have been informally referred to as 'Trump Accounts' or 'MAGA Accounts' (Money Accounts for Growth and Advancement). How much money does each child receive? Each eligible newborn would receive a one-time $1,000 contribution from the U.S. government, deposited into a mutual or index fund. Can families or others contribute more? Yes. Parents, religious institutions, and private organizations can contribute up to $5,000 per year into the account during the child's upbringing. When can the child access the money? Funds become partially accessible at age 18 for specific uses like education, vocational training, or a first home purchase. The full balance becomes available at age 30. Are there tax advantages? The accounts are tax-deferred, meaning investments grow tax-free until withdrawal — similar to 529 college savings plans, but with a lower annual contribution limit. Who controls the account before the child turns 18? The child's legal guardians would manage the account until the child becomes eligible to access the funds. Is this program already law? No. While the provision passed the House as part of a broader tax package, it's still under review in the Senate and faces opposition from some fiscally conservative lawmakers. Which companies support this plan? Dell Technologies has pledged to match the $1,000 for newborns of its employees if the plan passes. Executives from Goldman Sachs, Uber, Robinhood, and others have shown interest by attending White House discussions. How is this different from a 529 plan? 529 plans typically allow higher contributions and are geared specifically toward education. Trump accounts are broader in usage and provide an initial government-funded seed investment.
