Democrats Assail Bessent on ‘Privatizing’ Social Security Remark

(Bloomberg) -- Treasury Secretary Scott Bessent is coming under fire for remarks about so-called “Trump accounts” being a “backdoor for privatizing Social Security,” with Democrats characterizing his comments as representing a secret plan to gut the program. 

“In a way, it is a backdoor for privatizing Social Security,” Bessent said of the tax-advantaged investment accounts created by President Donald Trump’s signature domestic policy initiative, the One Big Beautiful Bill Act, which was signed into law on July 4.

“Social Security is a defined benefit plan paid out,” Bessent said at a Breitbart News event Wednesday in Washington. “To the extent that if all of a sudden these accounts grow, and you have in the hundreds of thousands of dollars for your retirement, then that’s a game-changer.”

The accounts can help young people feel like they are part of the system rather than being disillusioned with it, he added.

“Why are we on the verge of Caracas on the Hudson in New York?” Bessent said, referring to the campaign of Zohran Mamdani, the Democratic candidate for mayor of New York. “Why is this guy getting traction? Because people, young people, are disillusioned with the system.”

Hours later, Bessent sought to clarify his remarks. “Trump Baby Accounts are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments,” the secretary said in a post on X. “This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money.”

Earlier: Social Security Warns of 23% Benefit Cut by 2034 Without a Fix

Democrats seized on Bessent’s comments at the Breitbart event, calling them a scheme to cut benefits.

Bessent “just said the quiet part out loud,” said Tim Hogan, an adviser for the Democratic National Committee. “Trump is now coming after American seniors with a ‘backdoor’ scam to take away the benefits they earned. Democrats won’t stand by as Trump screws over working families in order to give more handouts to billionaires.”

Senator Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, warned that “Republicans would follow up privatization with brutal cuts that would drive vulnerable people into destitution.” 

A Treasury spokesperson said Bessent’s remarks had been taken out of context and that the accounts are meant to “work in conjunction with Social Security to broaden and increase the savings and wealth of Americans.”

“Social Security is a critical safety net for Americans and always will be,” the spokesperson said.

The savings program allows parents to contribute as much as $5,000 a year to an investment account for newborns that can be drawn upon when the child turns 18. The Treasury Department will contribute $1,000 to each account for children born between January of this year through 2028.

“When you do this, you make everyone a shareholder,” Bessent said. “People who are part of the system do not want to bring down the system.”

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