Twenty-three state financial officers sent a letter to the IRS on October 20 demanding the agency finalize rules that would bar ESG-focused funds from Trump Accounts, the new federal investment program for American children.
The letter, obtained by RedState, backs proposed Treasury and IRS regulations from August that would limit Trump Account investments to low-cost funds tracking broad U.S. stock indexes, capping annual fees at 0.1 percent. The officials argue environmental, social, and governance screening has no place in accounts meant to give kids a stake in the market.
“The principle running through them is that during the growth period a Trump account should hold broad, unfiltered exposure to the domestic equity market at the lowest available cost, with no judgment required of the account beneficiary,” the letter states. “An index that selects or weights companies on ESG criteria departs from that principle for the same structural reason a sector index does, because inclusion turns on something other than participation in the broad market.”
Trump Accounts give $1,000 in federal seed money to eligible American children born between 2025 and 2028, with families allowed to add their own contributions over time.
The signers specifically want the IRS to exclude funds that market themselves as ESG products, and they’re urging the agency to make its final call based on fund structure rather than debates over ESG investment performance. They’re also pressing for clearer disclosure rules covering what happens if a fund’s ESG status changes after approval, and how parents can switch their child’s money to another eligible fund.
Signatories include Arizona Treasurer Kimberly Yee, Kansas Treasurer Steven Johnson, Utah Treasurer Marlo Oaks, and Pennsylvania Treasurer Stacy Garrity.
OJ Oleka, CEO of the State Financial Officers Foundation, didn’t mince words in a statement emailed to RedState: “ESG might as well stand for ‘Everything Stops Growing.’ The last thing we should do with children’s financial security is allow it to get tangled in outdated woke activism. Trump Accounts remain a phenomenal idea by the President to set up future generations for success, and state financial officers are right to be vigilant in protecting this vital program from ESG nonsense that only threatens our kids’ ability to achieve the American Dream.”
Oaks, who also chairs SFOF nationally, added his own statement: “State financial officers have made significant progress pushing back against investment managers who put political agendas like ESG ahead of their duty to protect the financial interests of everyday Americans. Trump Accounts offer an important opportunity to help the next generation of Americans build financial security. We support the proposed IRS regulations to protect these accounts from politically driven ESG investment criteria. The principle is simple: the money in these accounts belongs to American children and must be managed solely in their financial best interests, not to advance someone else’s political agenda.”
The letter landed on the IRS’s deadline for public comment on the proposed regulations. The agency has not yet finalized the rules.
