Money for Babies? Dan Patrick Proposes State Savings Fund for Texas Newborns

Lt. Gov. Dan Patrick announced on X Wednesday that he plans to introduce a state-backed savings program for newborns, modeled after President Trump’s federal Invest America initiative, also known as “Trump Accounts”.

In his post, Patrick praised Trump’s program, which seeds $1,000 into a savings account for every American newborn and allows family members to contribute additional funds. 

He also highlighted the recent $6.25 billion donation from Michael and Susan Dell to Invest America, which would provide about $250 per child under 10 who is ineligible for the federal program.

Patrick proposed a Texas version called the “New Little Texan Savings Fund,” which would invest $1,000 per child in the S&P 500, effectively giving newborn Texans $2,000 when combined with the federal contribution. Parents could contribute additional funds, and the accounts would grow tax-free until age 18. 

Patrick said the program would cost roughly $400 million annually, which is about 1% of the state budget, and aims to be enshrined in the Texas Constitution as a permanent program.

Patrick noted that roughly 1,000 babies are born daily in Texas, totaling nearly 400,000 per year. He described the program as a way to return money to families while teaching children the value of savings and compound interest.

Reactions to the Proposal

Former state Sen. Konni Burton criticized it on X, where she wrote “This is absolutely horrific and an absolutely terrible, terrible idea… This should not pass,” while U.S. Sen. Ted Cruz, who helped create the federal program, called it “fantastic” and praised Patrick for taking the idea further for Texas children.

According to The Dallas Morning News, hypothetical projections illustrate the potential impact of such an investment: an 18-year-old born in 2007 with a $1,000 investment in the SPDR S&P 500 ETF Trust (SPY), reinvesting dividends, would have $6,344 by their 18th birthday, more than quadrupling in value even after inflation.

Under the federal model, funds can be used at age 18 for higher education, a down payment on a home, or startup costs. Patrick’s Texas plan would follow a similar structure, aiming to provide a long-term financial boost for young Texans.