Jumping right to it: Tariffs and global trade deals dominate the economic headlines. The thing is, I’m paying attention to what’s happening in our nation’s capital, where politicians are debating new legislation around our income taxes.

It’s serious business and will impact your spending decisions over the next few years. Issues include how the federal government will trim a budget in the trillions with possible and unpopular cuts to Medicaid. There’s SALT (state and local taxes) deduction debates. President Donald Trump campaigned for no taxes around tips, a policy that could be included, but has no significant impact. And if you buy an American-made car, you might be able to write off the interest on car loans. Higher up on the business chain: a proposal to lower the corporate tax rate to 15% from the 21% it sits at today.

Again, it’s policy business worth monitoring, especially if you’re an aspiring entrepreneur or small business owner. Buried in the theatrics of a $4 trillion plan is actually something we all can agree on: baby bonds.

In 2021, Apollo Global Management’s Shawn Wooden, then Connecticut’s state treasurer, helped establish the nation’s first baby bond program. Wooden and I also addressed baby bonds on a panel in 2024 at the Global Black Economic Forum. The program invests $3,200 in accounts for newborns with mothers on state Medicaid. However, it also helps combat the racial wealth gap by giving children a head start. It promotes financial literacy, as tests are required before accessing funds. Connecticut’s program is estimated to jumpstart each child with $11,000 to $24,000 entering adulthood.

“The point of this is to be an anti-poverty bill, a racial equity bill, as well as an economic growth bill – all wrapped into one,” Wooden, now a chief public pension strategist at Apollo Global Management, told Yahoo! in 2021.

It’s a brilliant idea that politicians want to adopt nationally, traces back to President Franklin D. Roosevelt’s saving bonds, and extends to economists Darrick Hamilton and William Darity, Jr.'s theory around Child Development Accounts. In March, the economic think tank Milken Institute published a study, The Economic Impact of Invest America Accounts, which offers more insights into baby bonds’ impact. It predicts a $1,000 investment into a baby bond will reach $8,000 in 20 years, $69,000 in 40 years, and if never touched until retirement (60 years), it could reach nearly $500,000.

On Thursday, I spoke with Milken Institute’s Director of Lifetime Financial Security, Cheryl Evans, to learn more about baby bonds.

“It’s financial engagement,” Evans says.” It’s also wealth building.” She informed me of two bills currently up for debate in Washington, D.C.

The MAGA Act account stands for “Money Account for Growth and Advancement.” The bill supports depositing $1,000 into an account for each child born between 2025 and 2028. The funds would be overseen by the U.S. Treasury, managed by private institutions, and invested in the stock market. Additionally, it allows family and friends to contribute up to $5,000 annually and will cost an estimated $17 billion over 10 years, Evans notes.

The second bill is the The American Opportunity Accounts Act. This plan also supports $1,000 for newborns. The money would be managed by the government and invested in the bond market. Evans notes that this bill is more aligned with eliminating poverty. The cost is an estimated $60 billion. Both options restrict funds until 18, and a portion can only be used for wealth-building tools, such as higher education, workforce training, buying a home, or starting a business.

There’s no agreement on how either bill would be funded. Who knows if it will actually solve our aging problem or the Silver Tsunami and promote more families to have children? These are all bigger questions. For now, we should at least agree that adopting a national baby bond policy is necessary, and maybe a national emergency. 

“The social impact,” Evans explains, “and the ability to have financial engagement (early) are key points. And also getting people to understand the markets and want to invest.” When people have that kind of economic jumpstart “sometimes it changes their mindset about what’s achievable.”

We should all continue to monitor the baby bonds debate. I also invited Wooden on The Enterprise Zone to discuss the topic at length. I’ll let you know when he accepts.

Speaking of The Enterprise Zone, this week Steve Beard, CEO of publicly traded education platform Adtalem, joined me at the Nasdaq MarketSite. We discussed how he improved Adtalem stock to $129 per share (as of May 12) from $37 in January 2023. It was a great lesson in leadership.

My One Interesting Read: With so much turmoil at home, more Americans are seeking to relocate to Europe. But not without challenges, writes the Financial Times.

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