U.S. Senator Ted Cruz (R-Texas) introduced the “Invest America Act” on Monday, a proposal to bolster the financial futures of American children. The legislation centers on establishing private, tax-advantaged investment accounts for every newborn, seeded with a $1,000 contribution from the federal government.
The bill received a significant boost as the U.S. House of Representatives included a version of the “Invest America Act” in the House Ways and Means Committee budget package, signaling support for the initiative.
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“The Invest America Act will trigger fundamental and transformative changes for the financial security and personal freedoms of American citizens for generations,” said Cruz. “Every child in America will have private investment accounts that will compound over their lives, enhancing the prosperity and economic participation of the vast majority of Americans. When people years from now talk about the changes created by Republican efforts this Congress, this is one of the landmark achievements they will talk about.”
The core concept of the “Invest America Act” is to provide each child with a financial head start.
Upon birth, a $1,000 deposit from the federal government will initiate the account. Following this initial investment, individuals, family members, friends, and businesses can contribute up to $5,000 annually.
The invested funds will be placed in a broad, low-cost fund tracking the S&P 500, allowing for long-term growth. The accounts will grow tax-deferred until the beneficiary reaches 18 years of age. Account distributions will be taxed at the capital gains rate upon reaching adulthood.
The proposal has garnered support from prominent business leaders. Brad Gerstner, Founder, Chairman, and CEO of Altimeter Capital, praised the bill, saying, “Invest America accounts are central to the Main Street Agenda — pulling every kid off the sidelines and putting them squarely in the game. When everyone realizes they can be an owner, it unites our country around free-market principles and unleashes the next generation of American success. This progress would not be possible without Senator Cruz’s leadership.”
Michael Dell, Founder, Chairman, and CEO of Dell Technologies, echoed this sentiment, stating, “Invest America accounts put every child in the front row of our economy. When the power of compounding meets the energy of young minds, we’re not just growing portfolios—we’re fostering the next generation of builders, dreamers, and doers who will keep America leading the world.”
In a related move, on May 1, 2025, Sen. Cruz introduced the Universal Savings Account Act, a bill that allows American families to save without the restrictions and penalties associated with traditional tax-advantaged accounts.
Cruz stated, “A simple and accessible incentive savings plan will provide families with a way to establish financial security and prosperity. This bill provides a straightforward solution to those challenges. I strongly urge my colleagues to pass this bill for the future generations of Americans.”
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Universal Savings Accounts (USAs) are tax-advantaged savings vehicles with unrestricted fund use. Participants can save, invest, and withdraw funds for any reason.
This bill would allow the following:
- Distributions from Universal Savings Accounts are not subject to income tax, nor included in gross income.
- An initial contribution limit of $10,000, which increases by $500 every year, before capping at $25,000.
- No contribution limits based on income.
Experts have found that Universal Savings Accounts would boost savings for low-income households, allowing them better to withstand economic shocks, such as pandemics and recessions, and plan for major expenses, such as an expanded family, education, and housing needs.
Companion legislation was introduced in the House by Rep. Diana Harshbarger (R-Tenn.-1).
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