Rep. Elijah Behnke believes the state should be chipping in to the Trump Accounts, which are currently expected to provide $1,000 to children born from 2025 through 2028, and he has introduced a bill that would make it a reality.
Under federal law, children born in those years are eligible for a one-time $1,000 deposit into a Trump Account, a tax-advantaged investment account designed to grow over time. Behnke’s bill would help Wisconsin children receive a state match of $1,000, giving each eligible child $2,000 to start.
Behnke estimated that, if the funds are invested in a broad U.S. stock market fund, that $2,000 could increase 5 1/2 times to $11,000 by age 18, then $28,000 by age 27, and $580,000 by retirement. He said that if families add $25 per month, they could grow the account to $24,000 by 18, $63,000 by 27, and $1.7 million by retirement.
The bill is racing the clock, as the Wisconsin Legislature is expected to end its session in late February or early March, but Behnke is confident it will get through the Assembly and the Senate, because leadership in both chambers like the ramifications, helping the next generation to achieve wealth that could be used to buy a home, pay for college or even fund retirement.
“It’s a popular idea,” Behnke said. “People realize that owning a home is starting to escape our kids — my kids. It’s possible the American dream is going to die because, when my daughters are old enough to buy a home, they’re going to be $700,000 for a little starter home.”
What Behnke is unsure about is if Gov. Tony Evers will sign off on the bill. Currently, there are only Republicans sponsoring the bill, he said.
“I can’t tell you if the governor is going to sign it, but I’m going to ask him to,” Behnke said.
He added that the lack of support from Democrats may stem from the accounts being named after President Donald Trump.
“That’s in the federal statute,” Behnke said. “That’s what they’re called.”
There are estimated to be 60,000 children born in Wisconsin every year between 2025 and 2028, so the bill has a $240 million price tag attached to it. Behnke expects the funding to come from the existing state surplus, which is currently around $1.4 billion.
The form for families, called IRS Form 4547, is available at www.trumpaccounts.gov, with the funds set up in a stock market account by early July. Behnke said that families that already had a child in the past year can sign up, even if the child was born earlier in the year.
“My legislation just follows with 100% uniformity, saying that if that account gets opened for a Wisconsin baby, the state surplus will send $1,000, making it $2,000, in this Wisconsin little one’s account,” Behnke said.
He added he has confidence that the concept of the Trump Accounts could go beyond 2028, especially if Republicans retain the White House after Trump’s term ends. The accounts, in his view, are a step toward financial freedom for the youngest Americans.
“I think there’s going to be an appetite between states and our nation to rethink how we’re investing in the next generation,” Behnke said. “Social Security has had its 80-year history, and it’s been a strain on the national budget, so to pivot to private equity that’s just encouraged by responsible government policy … I think that’s a great idea, and I think the Trump Accounts could maybe be the beginning of more private equity and maybe less government control of people’s retirement investments.”
Besides the adjustment in policy, Behnke believes his legislation will help young couples who have been delaying having children or limiting the number of children they bring into the world due to financial concerns choose to take the plunge.
“I think my wife and I would have had a third if day care wasn’t so expensive,” Behnke said. “Clearly, the cost of living is a factor when young families are planning.”
lpulaski@newmedia-wi.com
