Did Ted Cruz Just Make All of Our Kids Rich?
A Closer Look at a Surprising Plan for Kids and Money
Senator Ted Cruz wants to give every American baby a $1,000 investment account at birth. By all accounts, it’s not a gimmick. It’s a serious bill—and it might be one of the most interesting ideas in family policy this year.
Most of the time, I try to approach writing about elected officials the way a responsible dad approaches a bounce house at a birthday party: from a safe distance, with a touch of skepticism, and only getting involved when someone’s about to get hurt.
I also usually steer clear of dissecting the fine print of legislation, not because it doesn’t matter—of course it does—but because when it comes to family policy, the debate is often less about new ideas and more about where money goes. And frankly, once you start wading into appropriations tables and legal language, it’s easy to lose sight of the bigger picture. My goal here has always been to help parents think about the world our kids are growing up in—not just which bill made it out of committee last week.
But every so often, a proposal comes along that’s worth taking a closer look at—because it’s trying something different. That’s what happened when Ted Cruz introduced the Invest America Act. Yes, that Ted Cruz. Senator from my home state of Texas. Conservative lightning rod.Not a fan of cold weather. Guy who once accidentally started a Twitter fight with Elmo.
But, he’s also the Chair of the Senate Commerce, Science, and Transportation Committee, meaning when he speaks on economic policy, it carries weight. So, when he got a bill to give every American child a $1,000 investment account at birth added to the upcoming budget bill, I took notice.
What’s in the Bill?
The Invest America Act is pretty straightforward, at least by federal policy standards.
At birth, the federal government would contribute $1,000 into a private, tax-advantaged investment account. After that, additional contributions could be made—by parents, relatives, friends, or even businesses—with a combined cap of $5,000 per year. That’s total contributions from all sources, not $5,000 per donor. The money would be invested in a broad, low-cost fund tracking the S&P 500.
The funds grow tax-deferred until the child turns 18, at which point they can be withdrawn with taxes only applied on the gains, at the capital gains rate. Think of it as a simplified blend of a Roth IRA and a 529 plan—only seeded by Uncle Sam and designed to promote long-term financial growth from day one.
Why It Caught My Eye
There’s a lot of talk in the world of public policy about "investing in our children’s future," but most of it is metaphorical. This is literal. It gives every kid a piece of the market from the moment they’re born—an early foothold in an economy where ownership increasingly defines opportunity.
That’s a big deal. Right now, there’s a growing divide between people who benefit from asset growth—real estate, retirement accounts, stock portfolios—and those of us whose biggest financial asset is a minivan with two dents and a Paw Patrol sticker. Giving all kids a shot at building long-term wealth, regardless of their parents’ financial background, is the kind of upstream policy thinking we need more of.
And the math is compelling. If annual contributions hit the $5,000 yearly cap and the market grows at a 7% average rate, a child could have over $170,000 by age 18. If they keep the account going like that until age 35, they’d cross $700,000. By 55? Nearly $3 million.
Even more modest contributions—just a few hundred a year—could still give a child their first real safety net. It’s college money, a down payment, or even just the difference between financial stress and flexibility in their early adult years.
But beyond the raw numbers, this kind of policy reframes how we think about generational mobility. It’s not just about giving parents another tax credit—it’s about equipping the next generation with actual tools for financial independence. Not theoretical opportunity—real assets. That’s a meaningful shift.
Trade-Offs
All that said, good ideas live or die in the details—and this one comes with a few issues baked in.
The biggest problem? The starting $1,000 doesn’t go very far on its own. Even with strong market returns, it won’t turn into much by the time a kid turns 18—maybe a few thousand dollars. For the account to really grow, families have to add more money along the way.
But that’s the catch. Most families probably won’t be able to put in $5,000 a year. Some will be lucky to be able to put in $500. Between rent, groceries, and child care, there’s not much room left to invest. So, the kids whose families already have financial breathing room get the biggest benefit. Everyone else gets left behind.
That’s not just a wrinkle—it’s a core limitation. The way it’s described, a program like this is supposed to give all kids a boost. But if only some can take full advantage, it ends up reinforcing the gap it’s trying to close.
Then there’s the cultural side. It’s not hard to picture teenagers comparing account balances at school or turning their portfolios into social media content. Next thing you know, we’ve got a kidfluencer named ‘Capital Gains Kyle’ selling t-shirts with bar graphs on them shouting “Smash the like button if my S&P fund hits $100K!” That’s not necessarily harmful—it’s no lemonade stand, but it is entrepreneurial—but it could create strange dynamics between siblings or classmates, depending on how much each family can contribute.
This already happens to some degree, but with the limitation of you don’t know whether someone has an account. Under this bill, everyone would get an account, and everyone else would know they have it. In the age of digital everything, it’s easy to imagine this going in some weird, unanticipated directions.
So... Is It Worth It?
Honestly? Yes—with caveats. The idea is smart, but it needs to be designed for how people actually live—not just how they’re supposed to.
I’ll give Senator Cruz credit for putting forward an innovative proposal. In a policy landscape where most ideas feel like they were copy-pasted from a 2004 email forward, this one actually tries something new. It’s ambitious, forward-looking, and focused on giving kids tools for the long haul—not just another band-aid. That’s worth something.
Could it be better? Absolutely. Maybe the most promising path forward is a hybrid approach: give every child an account, but tailor the government’s contribution based on need—bigger investments for families with lower incomes, perhaps even matching contributions for the first few years of a child’s life. That would keep the free-market spirit intact while doing more to ensure this isn’t just another tax advantage for the wealthy that maintains the status quo.
We’re heading into an economic future that’s anything but predictable. AI, automation, and rising costs are already reshaping what work, money, and stability look like for the next generation. Giving kids a chance to start with something—even a small investment account—won’t solve everything, but it’s a step in the right direction. It’s real, it’s measurable, and it shifts some power toward the people who are usually last in line.
The bill’s not perfect. But it’s not just another tax credit or symbolic gesture. It’s an actual tool. And in a political landscape full of noise, that alone makes it worth paying attention to.
What Do You Think?
Think this is a cool idea? Hate it?
Want to see more posts like this - breaking down real policy proposals with a parenting lens? Already unsubscribing?
Let me know. I’m game to try this out for other policy ideas out there – holler if you see any you think might be interesting!
Love the bounce house analogy. I can think of multiple applications.
The trade-off section is very, very intelligent commentary my man.