Bessent backpedals after blowback on 'privatizing Social Security' comments

Treasury Secretary Scott Bessent is working to clarify recent remarks about the Trump administration’s new savings accounts for newborns, after his comments ignited criticism from Democratic lawmakers and AARP over concerns about the future of Social Security.

During an interview with Breitbart on Wednesday, Bessent suggested that the new “Trump savings accounts” could serve as “a back door for privatizing Social Security.”

"But in a way, it is a back door for privatizing Social Security," Bessent said, as reported by ABC as well as other media outlets.

The Trump savings accounts, part of the recently passed One Big Beautiful Bill Act, will see the government deposit $1,000 into a tax-deferred, low-cost index fund for every child born after December 31.

Also known as Trump baby accounts – and, when they were still being proposed in the House, MAGA accounts – they will enable families to contribute up to $5,000 each year, with funds accessible for major expenses like college or a first home once the child reaches adulthood.

The program is being promoted as a way to encourage financial literacy and investment from an early age.

“And, you know, people can put in up to certain amounts every year for their child, and they can invest that stuff in the market, and they can learn how to do this,” Bessent said in the Breitbart interview.

It is unclear exactly by what mechanism Bessent – one of several personalities likely to be named by President Donald Trump to succeed Jerome Powell as Fed Chair – possibly imagined the Trump accounts could be used to put Social Security in private hands.

Still, Bessent's words on their face alone were enough to provoke a backlash from Democratic leaders.

On Thursday following the interview, Senate Minority Leader Chuck Schumer highlighted how "Secretary Bessent had rushed to Twitter" – referring to the social platform X's former moniker – " to do a little cleanup, but the truth came out."

"Actions speak louder than words, and the actions Donald Trump and his gang are taking against Social Security speaks volumes,” Schumer said.

Representative Katherine Clark wrote on X: “Well, Republicans said the quiet part out loud: They want to ‘privatize Social Security.’ Your money. Your benefits. Sold to the highest bidder. So much for standing with seniors.”

Elsewhere, Representative Richard Neal added, “Today the Treasury Secretary said the quiet part out loud: Republicans’ ultimate goal is to privatize Social Security, and there isn’t a backdoor they won’t try to make Wall Street’s dream a reality.”

AARP, the influential organization for older Americans, also weighed in with its own statement immediately after the Breitbart interview on Wednesday.

“AARP condemns Treasury Secretary Scott Bessent’s endorsement of a ‘backdoor’ to Social Security privatization. We have fought any and all efforts to privatize Social Security, and we will continue to,” said John Hishta, senior vice president of campaigns at AARP.

In his social media response to the blowback, Bessent said: “Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments.”

“This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money,” he wrote.

Bessent reiterated this stance later on CNBC, emphasizing that the new accounts are intended as a supplement, not a replacement, for Social Security.

“Over time, the compounding is going to be an incredible supplement to Social Security, not a replacement. It is a complement,” he said.

Frank Bisignano, the current commissioner of the Social Security Administration who was nominated by Trump, has also gone on the record denying the existence of any push to privatize Social Security.

"I’ve never thought about privatizing. It’s not a word that anybody’s ever talked to me about,” Bisignano told the Senate Finance Committee during his March confirmation hearing.