New group pushes govt-funded investment accounts for all American kids
Matt Lira, a longtime Republican operative, has agreed to lead a nonpartisan group that will promote an initiative whereby all American newborns would get taxpayer-funded investment accounts.
What he's saying: "There's a wave of skepticism right now about institutions and that the game is rigged for certain players," Lira tells Axios. "Here's a way for everyone to participate in the upside of American capitalism, thanks to the miracle of compounding returns, and also help enhance financial literacy."
Details: The basic idea would be for the U.S. Treasury to create a $1,000 seed investment account for every baby born in America.
- The money then would be invested in the S&P 500 or in similar passive index funds, to be managed privately with parents able to select the custodians. Account holders would be eligible to withdraw upon becoming legal adults.
- Parents also could contribute more cash, but would not be able to make redemptions.
- Lots of specifics still need to be worked out before draft legislation is written, with Lira saying the $1,000 amount and withdrawal age both remain points of discussion.
The big picture: They're called Invest America Accounts, and are the brainchild of Brad Gerstner, founder and CEO of tech investment firm Altimeter Capital.
- "As I've gotten to know him, I've been struck by the range of stakeholders who trust Matt and who have worked with him to get things done," Gerstner says. "I look forward to the progress we can make together on this important initiative."
- Lira served in the Trump White House and was a senior adviser to both Kevin McCarthy and Eric Cantor when they were House majority leaders.
By the numbers: There were nearly 3.66 million kids born in America in 2021, which means the program that year would have cost U.S. taxpayers at least $3.66 billion (administrative costs could boost the total a bit).
The bottom line: Lira plans to hire out a staff that will conduct research an engage with policymakers.
- The playbook will in part be modeled after opportunity zones (the initiative, not the specific policy), whereby the homework and legwork got done in waiting for a big legislative window, which became the 2017 tax bill.