If you follow our congressman’s news, you’ve probably seen him touting a new bill — the CAL Repayment Act — as a stand for fiscal accountability and a way to protect California’s small businesses and farmers from Sacramento’s mistakes. And I’ll say plainly: the instinct behind that is fair. California does owe a real debt. Our employers are paying more because of it. If you heard “accountability” and nodded, you were responding to something true.

So I did what I think a representative is supposed to do for you — I sat down with the actual text of the bill (it’s short, and it’s public), and I read it the way I’ve spent a career reading insurance policies for the people I serve: not for what it’s called, but for what it will actually do to the people it touches. And what I found is that the name is doing an enormous amount of work the text simply does not back up.

What it is

It’s H.R. 8892, introduced May 19, 2026. It amends one corner of the Social Security Act — the part that governs the loans states take from the federal government to keep unemployment checks going when their state funds run dry. It was sent to the House Ways and Means Committee, picked up a single cosponsor from Pennsylvania, and there it has stayed. No hearing. No vote. Filed and parked. To be fair, any movement so soon after being introduced would be unusual and rare.

What this bill does and does not do

Here’s what the bill does not do. It does not put one dollar toward California’s existing debt — the roughly $21 billion everyone’s worried about. By its own words, it only applies to federal money awarded after it becomes law. The debt we have right now remains untouched.

What it does do: if California ever receives certain future federal funds, the state would have to use those funds to pay down the unemployment debt first, within five business days — before spending them on anything else. And if California doesn’t? The penalty isn’t “pay back what you misspent.” If the state diverts any of that incoming federal money — the eligible federal funds it receives that were supposed to go toward the $21 billion EDD (Employment Development Department) debt — to another purpose first, the bill says it must hand back “the full amount of the funds,” the entire disbursement it received and not just the diverted portion, within five business days.

And — this is the part I keep coming back to — the bill gives our employers no relief at all. The higher payroll tax they’re already paying keeps climbing under existing law, exactly as it does today. So a bill sold as protecting small businesses doesn’t lower a single business’s taxes by a single penny.

Where the $21 billion debt really came from

Before we go further, we need the whole story of what led to this debt, because almost everyone gets parts of it wrong.

Let’s start with the boring part, because it’s the most important: California’s unemployment fund is paid for entirely by employers, and only on the first $7,000 of each worker’s wages — one of the lowest taxable bases in the entire country. That base is so small that even in good years the fund collects less than it pays out, so it never built a real cushion. When COVID hit in 2020 and the state’s own shutdown orders put millions of people out of work almost overnight, the fund was drained within weeks, and California borrowed from the federal government to keep the unemployment checks flowing — about $17.8 billion by the end of that first year. That borrowing is what grew into today’s $21 billion. At its root, it was and is real money paid to real Californians who really lost their jobs, drawn from a fund that was never built to withstand a shock like a global pandemic.

Now the part that still makes people in this district angry — and they have every right to be. The EDD fraud during the pandemic was real, it was staggering, and it still is a genuine scandal. The state has confirmed at least $11.4 billion in fraudulent payments, and estimates of the true total run as high as $20 to $32 billion. Benefits went out in the names of people who didn’t exist, of people behind bars, even of sitting U.S. senators — and some of it landed with criminal rings overseas. The EDD was overwhelmed, it had let its own fraud defenses lapse, and it waved claims through in a way critics fairly called “pay now, verify later.” It was and is a betrayal of every honest taxpayer in this valley and the state. The people responsible need to be held accountable for it.

But here is the part the folks shouting “the debt is the fraud” don’t want you to hear: by the EDD’s own accounting, 95% of that fraud — all but about $1.3 billion of it — came out of a separate, federally funded pandemic program — Pandemic Unemployment Assistance (PUA), paid with Washington’s money, not drawn from the state fund that owes this $21 billion (EDD; Governor’s office via the Mercury News). Roughly $1.3 billion of fraud did hit the regular state Unemployment Insurance program, and that’s real money that can’t be ignored — but $1.3 billion is a sliver of a $21 billion debt that paid for overwhelmingly legitimate claims, sitting on top of a tax base that’s been too low for decades.

And let me be as fair to the state as I’ve been hard on it: Sacramento has not done nothing about the fraud. The EDD has now clawed back more than $5.9 billion of the stolen money, brought in a former U.S. attorney to lead the investigations, and opened nearly 1,800 fraud cases. It has spent close to a billion dollars rebuilding the system through a modernization effort called EDDNext — new identity verification, a public claims dashboard, and the prison-inmate cross-check that should have existed all along — and says it has now adopted all 21 of the State Auditor’s fraud-fighting recommendations. That is a real reckoning.

Two hard truths sit beside the reckoning. Most of the money is simply gone — roughly $5.9 billion recovered out of an estimated $20 billion, much of the rest wired overseas and never coming back. And because the fraud was overwhelmingly federal money, the dollars the EDD does recover are mostly returned to Washington — those dollars do not pay down our $21 billion Unemployment Insurance debt. So even a flawless fraud cleanup wouldn’t retire this $21 billion debt. These are two separate problems, and only one of them — the $21 billion one — is why your payroll taxes keep climbing.

So hold all of this in your hands at once, because it’s all accurate: the EDD fraud was, and is, a real scandal, the state is finally cleaning up after it, and it is still not the reason we owe this $21 billion. Anyone who blurs those things together is hoping you’ll be too angry to check the facts. It is important to know all the parts of what happened and how we got here, because they overlap.

How the CAL Repayment Act bill singles out California

Notice the bill never says “California.” It’s written generically — “a State,” as if it could apply anywhere. But here’s the quiet part: California is the only state in the country still carrying this COVID-era debt. New York paid off roughly $8 billion and got out. Connecticut got out. Even the home state of the bill’s one cosponsor — Pennsylvania — already paid theirs off.

So when you strip away the generic wording, you’re left with a “national” law, written at the precise moment California is the last state owing the COVID-era UI debt, whose mandate and whose penalty can — right now — fall on us and nowhere else. That’s not reform. That’s a bill with one address on the envelope, and the address is California, USA.

How the CAL Repayment Act kicks us while we’re down

California’s employers have already paid about $5.97 billion in higher federal taxes because of this debt — roughly $84 per employee and rising every year. That’s a real weight, and it lands hardest on the small business operations that are the Central Valley economy. They are already down.

And this bill’s answer to people who are already down is a new trigger aimed at the future. If California receives federal money it could lawfully put toward the loan — the flexible relief dollars a state actually has discretion over — it would have to send that money to the $21 billion debt first, within five business days, before spending a dollar of it here at home. And if the state spent it on California’s needs first? It would have to pay the entire amount back. The bill offers us nothing in return. No relief, no rebate, no plan.

Here’s the part that tells you everything: The business groups who’ve been sounding the alarm on this debt — the chambers, the employer associations — have a clear ask. They’ve been asking Sacramento for direct aid and small-business tax rebates — the very thing New York used to dig out of their COVID-era debt. Our congressman borrowed their alarm and their numbers, and then wrote a bill that delivers the opposite of what they actually asked for. He gave them a hammer when they asked for a hand.

And Sacramento? Also not delivering

I’m a Democrat, and I’m not going to pretend my own party has handled this well. If I’m going to be accurate about Washington, I must be just as accurate about Sacramento.

(Here’s where things stood as of June 9, 2026. The state budget has to be finalized by June 15, so this could still change — and I’ll update it if it does.) 📅

As I write this, the state budget moving through the Legislature does almost nothing for the employers carrying this debt. It covers the interest California owes on the loan — about $662 million in the coming fiscal year — but puts no money toward the principal itself (EDD’s own forecast projects the balance hitting $22.1 billion by the end of this year). In five years, the state has made exactly one principal payment — $250 million, back in 2022. As the nonpartisan Legislative Analyst’s Office put it, we’ve essentially been making interest-only payments.

And the $750 million for the UI Fund and $500 million in small-business tax rebates that businesses were promised back in 2022? Still not delivered — scaled back and deferred, year after year.

The one piece of actual small-business relief in the Governor’s May proposal is modest: cutting the $800 first-year minimum business tax in half, to $400, for brand-new LLCs and partnerships in 2027 through 2029. That’s something — but it’s small, it’s only for new businesses, and it has nothing to do with the unemployment debt squeezing the employers who are already here. Meanwhile, this is a tight budget that closes a deficit and even raises a few business taxes. There simply isn’t any real relief in the proposed budget.

So let’s put both halves together to see the whole situation: the employers carrying this burden are getting a press release from Washington and an interest-only holding pattern from Sacramento. Neither one is relief. Both parties have had years to fix this, and both have handed our small businesses a bill instead of a hand.

Why Sacramento can’t get out of its own way: follow the lobbying

If you’re wondering how a state this size lets a $21 billion debt just sit there for five years, the answer isn’t a mystery — it’s lobbying muscle and lack of political will. For nearly twenty-five years this exact issue has been frozen by a standoff between two of the most powerful forces in the Capitol, and neither will let the other win.

On one side is the business lobby — the California Chamber of Commerce, the National Federation of Independent Business, the California Business Roundtable. They block any move to raise the employer tax or expand benefits while the fund is in the red. Their signature weapon is the Chamber’s “Job Killer” list, and it works: since 1997, bills branded a “Job Killer” have been defeated or neutralized roughly 90% of the time.

On the other side is organized labor — the California Labor Federation, SEIU, the teachers’ union — which pushes to protect and expand benefits and would rather shore up the fund by raising the employer tax than by cutting what workers receive. With union-friendly Democrats holding roughly three-quarters of the Legislature, they have the votes to stop anything that trims benefits.

You can watch the collision play out across the whole twenty-five years — and it starts long before COVID. In 2001, SB 40 (Alarcón) nearly doubled the maximum weekly benefit, from $230 to $450, and raised the share of wages it replaced — a major labor win. But the same law pointedly did not raise the $7,000 taxable wage base or the tax rate to pay for it (LAO). Benefits went up; the money to fund them did not. That is the moment the structural hole was dug.

And that hole has never been filled, because the revenue side of the fix is the business lobby’s reddest line. California still taxes employers on only the first $7,000 of each worker’s wages — a figure frozen since 1983, the lowest base in the country, capturing less than 15% of what people actually earn (Kabateck Strategies). Every serious proposal to raise it runs straight into a “Job Killer” tag and dies.

If you want proof this is a chronic stalemate and not a one-time pandemic accident, look at what happened the last time the UI fund ran dry. During the Great Recession, California borrowed approximately $10 billion from the federal government, never repaid it from the state’s own pocket, and let Washington raise employer payroll taxes until the debt was finally cleared in 2018. Employers paid off the entire thing — and the California Legislature still refused to fix the base underneath it. So when COVID hit a fund that was already nearly empty, the exact same collapse happened again, only bigger. We ran this play once, learned nothing, and ran it again.

The bills since 2020 are just the latest rounds of that same fight. SB 799 (2023) would have given striking workers unemployment benefits — a Labor Federation priority, branded a Job Killer, and vetoed by Governor Newsom over the strain on the fund. SB 1116 (2024) tried again. SB 1434 (2024) would have raised the maximum weekly benefit by more than half — CalChamber estimated it could cost employers over $1.2 billion a year — and it died in committee. Each side can kill the other’s fix, so the only thing everyone agrees on is to do nothing — and “nothing” means paying the interest and letting the $21 billion COVID-era debt sit unpaid.

And the lobby money behind that paralysis is enormous and sustained — and now that the latest lobbying filings are in hand, we can see how lobbying effort was aimed squarely at these bills. In 2024, special-interest lobbying of California’s government hit a record $540 million. Within that fight, the California Chamber of Commerce reported about $5.4 million for the 2023–24 session and the California Business Roundtable about $5.0 million, both registered against the benefit bills — with the Chamber tagging them “job killers.” On labor’s side, SEIU reported roughly $3.4 million and the California Labor Federation millions more, in support. And none of this is new: the very same alignment shows up in the 2001 filings on SB 40 — the Chamber, the Business Roundtable, and National Federation of Independent Business (NFIB) lobbying against, the Labor Federation and SEIU lobbying for. Two sides, a quarter-century, a fortune — fought to a standstill, while the debt grew and your small businesses got handed the tab. (Dollar figures from California’s Cal-Access lobbying database; ⚠️ the totals are not all on an identical reporting basis — SEIU’s appears to reflect a single year — and the 2001 amounts rest on those filings alone.)

And the people paid to work these bills are a who’s-who of the two camps — the Chamber’s Robert Moutrie, the Labor Federation’s Sara Flocks and its president Lorena Gonzalez, NFIB’s John Kabateck, and the Business Roundtable’s Rob Lapsley. That last name should ring a bell: Lapsley is the same Business Roundtable president who co-authored Congressman Fong’s January op-ed on this very debt (fong.house.gov). The business lobby that has spent millions in the Sacramento fight and the congressman now campaigning on its talking points are, quite literally, co-authors.

(One note on how to apply these figures: California’s lobbying reports disclose each group’s total spending and the list of bills it lobbied, but never the dollars spent on any single bill. So every amount above is an organization’s overall lobbying total — never a per-bill figure, which the state doesn’t require anyone to report.)

Before Fong ran against Sacramento, he was Sacramento

Here’s the part I think every voter in this district needs to acknowledge: the man now presenting himself as the watchdog of this debt is no newcomer to it. Vince Fong spent seven years in the State Assembly — from 2016 until he left for Congress in 2024 — and for most of that time he was Vice Chair of the Assembly Budget Committee. He held a senior seat at the state’s budget table for the entire stretch this debt was created and the surpluses came and went.

I’ll give him his due: he was a consistent critic of those budgets, and he and his Kern County colleagues argued that the surplus should go toward paying the debt down. As far back as a 2023 budget hearing, he pressed the Department of Finance directly about the loan — and was told the administration’s plan was to “lobby at the federal level … in regards to forgiveness” (East Bay Times), forgiveness that never came. That’s a real position, and it’s consistent with what he says today. He didn’t invent this issue for a campaign; he raised the issue when he was in Sacramento.

But fairness cuts both ways. When the EDD crisis exploded at the end of 2020, the bill Fong put his name on that session wasn’t about unemployment or the EDD at all — it was a proposal to move money out of high-speed rail and into schools. The bill to actually overhaul the EDD that year came from a Bakersfield Democrat, Rudy Salas; the Republican EDD-fraud reform bills were carried by Senate Republicans (Bakersfield Californian). On the very crisis he now builds his Washington career around, his Sacramento footprint was the microphone, not the fix.

And in fairness, he was in the minority — Republicans couldn’t pass a bill or move the budget on their own, and it would be ridiculous to think otherwise. He couldn’t have forced a solution by himself. But that’s exactly why his current story doesn’t sit right. He blames “Sacramento’s negligence” for a debt he sat across the budget table from for seven years. The fix he championed then — use the real surplus dollars to pay it down — was more reasonable than the bill he’s offering now, which spends not one dollar of California money and would only ever touch hypothetical future federal funds. And the one reform the nonpartisan analysts say would actually keep the fund solvent — broadening the tiny $7,000 base it runs on (LAO) — is itself a tax increase on employers, and opposing tax increases is the throughline of his whole career: the Howard Jarvis Taxpayers Association endorsed him for exactly that record, and he has pledged to keep it up (HJTA). He wants the debt gone — but through paydown, not the revenue reform that would keep it from happening all over again.

So when you hear him say Sacramento failed, believe him. He was there.

What real accountability looks like

I think California needs to pay what it owes, and I think state leaders earned the criticism for letting this drift through the surplus years, when there was real money on the table to retire it. You can acknowledge that and still see the CAL Repayment Act for what it is.

Because accountability that helps CA-20 doesn’t look like a press release aimed at the one state still climbing out of the hole. Accountability looks like fighting for the relief our employers have been begging for. It looks like protecting the federal water and infrastructure dollars this district can’t farm without. It looks like a representative who treats the district office not as optional, but as an instrument — something you pick up on day one and use to actually move money and solve problems for the people who live here.

A bill that punishes your own district and calls it courage isn’t standing up for California. It’s standing on California.

We feed the nation. We deserve a representative who feeds us back.

With gratitude — and with my whole heart in this fight,

Sandra

Sources

Every figure in this piece traces to the record. ✅ marks a primary or government source; ⚠️ marks a secondary source (news or advocacy) used where a primary record isn’t readily public.

The bill itself

1. ✅ H.R. 8892, the “CAL Repayment Act” — Congress.gov — official sponsor, cosponsor (Rep. Lloyd Smucker, PA-11), committee referral, and status (no hearing, no vote).

2. ✅ 42 U.S.C. § 1322 — Legal Information Institute, Cornell Law School — the section of the Social Security Act the bill amends, including the prospective effective date and the existing voluntary-repayment structure.

The debt and the cost to employers 3. ✅ California EDD — Federal Unemployment Tax Act (FUTA) page — the outstanding UI loan balance and the rising employer FUTA cost. 4. ✅ California EDD — January 2026 UI Fund Forecast (PDF) — projected loan balance of $22.1 billion by end of 2026; the $17.8 billion first-year (2020) borrowing; confirms a single $250 million principal paydown (2022, AB 178). 5. ✅ U.S. Treasury — Title XII Advance Activities dataset — the live, daily federal record of which states owe and how much. 6. ⚠️ CalTax, reporting EDD’s forecast (May 29, 2026) — the $5.97 billion in higher taxes California employers have already paid; drawn from the primary EDD January 2026 UI Fund Forecast.

How the debt was built — and the EDD fraud 7. ✅ California EDD — Contribution Rates & Taxable Wage Limit — the $7,000 taxable wage base, one of the lowest in the nation, that structurally underfunds the system. 8. ⚠️ CalMatters — How California’s COVID unemployment system failed — the $20–32 billion range of total estimated pandemic fraud and EDD’s institutional failures. 9. ✅ California EDD — “Fraud by the Numbers” fact sheet (PDF) — EDD’s own breakdown: 95% of confirmed fraud from the federal PUA program, 5% from the state UI program. 10. ⚠️ Governor’s office, via the Mercury News (June 2022) — of the ~$20 billion in fraud, “all but $1.3 billion” involved federally funded pandemic programs.

Why it lands only on California 11. ✅ Federal Register — 2025 FUTA credit-reduction states — the federal list confirming which states still carried balances (not Pennsylvania). 12. ⚠️ Equifax Workforce Solutions — state UI loan repayment update — New York’s ~$8 billion payoff and Connecticut’s repayment in 2025.

What the business community actually asked for 13. ⚠️ CalChamber Advocacy — coalition urging UI debt assistance — the $750 million UI Fund contribution and $500 million in small-business tax rebates employers requested.

The state budget (as of June 9, 2026) 14. ✅ Governor’s Office — 2026-27 May Revision — the revised budget that closes the deficit; the first-year minimum-tax reduction for new businesses. 15. ✅ Legislative Analyst’s Office — Initial Comments on the May Revision — nonpartisan analysis confirming the tight, deficit-closing budget and selected business-tax increases. 16. ⚠️ ABC10 — California employers face higher taxes as UI debt tops $20 billion — the ~$662 million interest-only payment and the LAO’s “interest-only payments” characterization.

Fong’s Sacramento record 17. ⚠️ Associated Press / Los Angeles Times — Fong as Vice Chair of the Assembly Budget Committee, criticizing the state budget plan (June 2023). 18. ⚠️ East Bay Times (Feb. 2023) — Fong questioning the Department of Finance about the UI loan at a budget hearing; Finance’s deputy citing a plan to seek federal “forgiveness.” 19. ⚠️ Bakersfield Californian (Dec. 2020) — Fong’s AB 5 (redirecting high-speed-rail funds to schools) vs. Assemblymember Rudy Salas’s AB 56 (EDD overhaul); the prison-inmate fraud that prompted reform bills. 20. ✅ California Senate Republican Caucus — the GOP EDD-fraud reform bills (SB 58, SB 39, SB 232), carried by Senate Republicans Wilk, Grove, and Nielsen. 21. ✅ Legislative Analyst’s Office — “Fixing Unemployment Insurance” — the recommendation to raise California’s $7,000 taxable wage base, the structural fix for fund solvency. 22. ⚠️ Howard Jarvis Taxpayers Association PAC endorsement of Vince Fong — the anti-tax watchdog’s endorsement citing his record against tax increases (documents his general anti-tax record, not a specific wage-base vote).

How Sacramento responded to the fraud 23. ✅ California EDD — “Our Response to Criminal Fraud” — more than $5.9 billion in stolen funds recovered; nearly 1,800 fraud cases opened (data through September 2025). 24. ✅ Legislative Analyst’s Office — Overview of Efforts to Modernize EDD Systems — the multi-year, ~$900 million EDDNext modernization funded across the 2022–2026 budgets. 25. ✅ Assembly Budget Committee / EDD — EDD’s implementation of all 21 California State Auditor fraud-fighting recommendations, including inmate-data cross-matching and streamlined identity verification.

Sacramento’s lobbying stalemate 26. ⚠️ CalMatters — “Has California’s much-dreaded ‘job killer’ list lost some of its bite?” — the ~90% kill rate of CalChamber’s Job Killer list; SB 799 and the strikers’-UI fight. 27. ⚠️ CalMatters — Lobbying California officials topped half a billion dollars in 2024 — the $540 million record; SEIU and CalChamber spending figures. 28. ⚠️ CalMatters — “Tough love could end California’s unemployment insurance stalemate” — the 25-year business-vs-labor deadlock. 29. ✅ California LAO (2010) — “California’s Other Budget Deficit: The UI Fund Insolvency” — SB 40 (Ch. 409, Statutes of 2001, Alarcón) doubled the maximum benefit without raising the $7,000 wage base or tax rate; the fund’s January 2009 insolvency. 30. ⚠️ CalMatters — California’s unemployment insurance debt problem — the Great Recession ~$10 billion loan, repaid by employers via higher federal taxes by 2018, with no structural fix before COVID. 31. ⚠️ Kabateck Strategies — California UI debt: what employers need to know — the $7,000 taxable wage base, frozen since 1983 and the lowest in the nation. 32. ⚠️ CalChamber — “Job Killer Bill Increasing UI Taxes Stopped” — the $1.2 billion-a-year employer-cost estimate for SB 1434. 33. ⚠️ California Secretary of State — Cal-Access lobbying database — org-level lobbying totals and bill positions for CalChamber ($5.4M, 2023–24), the California Business Roundtable ($5.0M, 2023–24), SEIU (~$3.4M), the California Labor Federation, and NFIB, on SB 40 (2001) and SB 799 / SB 1116 / SB 1434 (2023–24). Compiled from Cal-Access and reviewed by the campaign; not independently re-verified. Totals are not all on an identical reporting basis, and the 2001 figures rest on those filings alone.

Paid for by Sandra Van Scotter for Congress · sandra4cd20.com

Last week I did something nearly every candidate eventually does. I sat down with a phone and a list of registered voters and I called them, one by one, to ask for money. They call it “call time.” It is widely understood and accepted to be a “rite of passage” for almost everyone running for public office. I understood it that way too, up until I tallied the result.

Lots of great conversations. Zero donation commitments.

This was my very first time participating in this “call time” process. I wondered if I was “bad” at this, because the quality of the conversations did not translate to donations. Then I wondered if the people I was reaching are apathetic or just ready for this election cycle to be over. Do they not care enough to chip in twenty-five dollars for something they say they care about? And then, sitting there with a cold list and zero commitments, I could physically feel the logic that pulls candidates toward PAC money and organized interest groups. A PAC doesn’t make you sweat through hundreds of “no thank yous.” A PAC writes one check. The attraction is arithmetic.

So, being the forever-student I am, I wanted to know if the political campaign fundraising process ever included individual small-dollar donors. Was there a time when the average citizen stopped funding campaigns and let the “big money” take over? So I went looking….

I found three answers — a history, a psychology, and a trap. We did not abandon a system we used to fund. The reason our anger at money in politics hasn’t turned into action isn’t apathy. And the anger itself is being quietly turned against us. Every one of these answers points to an inaccuracy the “money in politics” situation tells us about ourselves. Let me show you why.

Part One: The history — we didn’t leave, because we were never in the room

My search into the answers to my questions led me to a history lesson. I initially thought ordinary people used to chip in to fund their preferred candidates, their dollars got drowned out by bigger donors, they gave up in disgust, and PACs rushed into the vacuum the citizens left behind. The story I told myself casts us as the betrayed donors who walked away.

I went looking for the evidence to support my hypothesis. It isn’t there. The real history runs differently, with a few twists.

Before the campaign-finance reforms of the 1970s, federal elections ran on party machines and wealthy individuals — not fueled by small-donor public contributions. The reason is simple: until those reforms, money from business interests could enter elections in essentially unlimited amounts, as large contributions from wealthy people tied to corporations (⚠️ secondary — American Enterprise Institute). Nobody needed to pool $25 checks from a mass public when a handful of “fat cats” could fund the whole thing. The participatory, citizen-funded golden age I thought I would find never existed.

Even the first political action committee (PAC) wasn’t a corporate scheme — it was a labor union. The CIO-PAC, formed in July 1943 (✅ scholarly — Oxford University Press), helped re-elect Franklin Roosevelt after Congress barred unions from giving directly to candidates. Unable to spend treasury money, the union pooled small voluntary contributions from individual members (⚠️ secondary — OpenSecrets). Note: the very mechanism that overshadows the modern day small-dollar individual donor began its life as a way to organize small-dollar individual donors.

Then came more irony: After Watergate, Congress passed the Federal Election Campaign Act — enacted in 1971, amended in 1974 and 1976 (⚠️ tertiary — Britannica) — to clean up big money in politics by capping direct contributions to candidates. But capping the money didn’t make it vanish. It made the money look for a new container, and the container was the PAC. In 1975, the Federal Election Commission’s SunPAC opinion (AO 1975-23) (✅ primary — FEC.gov) opened the door for corporations to run PACs the way unions had. The FEC’s own records show what followed: there were 608 PACs at the end of 1974, and more than 4,100 by the early 1990s (✅ primary — FEC.gov). And the growth never stopped. After the Supreme Court’s Citizens United decision in 2010 opened the door to Super PACs and hybrid PACs — categories that didn’t even exist in those earlier counts — the number climbed again: in the most recent full election cycle, roughly 8,970 federal PACs reported activity to the FEC through September 2024 (✅ primary — FEC.gov). (One honest note: the older figure counts committees registered, while the newer one counts committees that reported financial activity, so they aren’t measured in precisely the same way — but both are the FEC’s own numbers, and the trajectory is unmistakable.) From 608 to nearly nine thousand PACs. Reformers trying to push big money out of politics had accidentally handed money in politics a faster delivery truck — and tilted the field toward the organized interest groups with the most corporations to sponsor those PACs.

So when did the small-dollar donor arrive? Relatively recently. Mass small-dollar giving came with the internet. The share of Americans who say they donated to a candidate doubled from 6% in 1992 to 12% in 2016 (⚠️ secondary — Pew, drawing on the academic American National Election Studies, ✅; that survey series isn’t cleanly published past 2016). Decades of FEC data show small donors only began outpacing larger donors around 2008 (⚠️ secondary — Bipartisan Policy Center), and small-dollar fundraising climbed to a record peak around the 2020 cycle. The small-donor movement isn’t a return to a lost ideal. It’s a recent invention — young, and not yet established.

So here is the first thing individuals did not break: we did not walk out of a system we used to fund. There was no participatory past for “big money” to steal from us. We can’t abandon a room we were never invited into. The small-dollar individual donor isn’t the relic in this story — the small-dollar donor is the brand-new arrival.

Part Two: The psychology — our silence isn’t apathy, it’s arithmetic

Fine, you might say — but people are furious about money in politics. So why hasn’t that anger become a wave of small, individual donations? Why don’t the millions of people simply take over the political funding and fundraising process?

This has a deep, well-established answer, and it has a name: the collective action problem.

In 1965, the economist Mancur Olson published The Logic of Collective Action (✅ scholarly — foundational text), and his core finding explains the zero donation commitment I ended my “call time” session with. Large groups with diffuse interests struggle to organize, while small groups with concentrated interests dominate — because in a big group, each person rationally figures their single contribution won’t change the outcome, so they hold back and let others carry the cost (⚠️ tertiary — Encyclopedia.com, summarizing Olson).

A civics textbook puts the mechanism plainly: there’s a disincentive to call your member of Congress, because one call rarely sways a politician (✅ educational — Texas higher-ed OER). The same logic governs our checkbooks. An oil company has an intense, focused, dollar-quantifiable stake in a single vote, so it organizes and gives. Each of us, as one of three-quarters of a million constituents in this Congressional District, has a stake that’s just as real but diffuse — and the nagging sense that our $50 is a drop in the ocean of a candidate’s financial need. Multiply that feeling across a hundred million angry people and we get exactly what we see: enormous aggregate anger, almost no aggregate donating. Expressing anger is easy; donating is costly. So anger flows most easily into the cheap forms of participation — a vote, a poll response, an angry social media post — and only rarely clears the higher bar of the wallet in the form of a donation to a candidate promising to make a difference.

And here is what completes the picture: even the waves that did happen never actually took over. Obama, Sanders, Ocasio-Cortez — those were real small-donor surges. But even at the high-water mark, big money still overwhelmed small-dollar donations. Obama’s celebrated small-donor machine still drew most of its money from large donors; his under-$250 gifts were only about 34% of his 2012 total (⚠️ secondary — Washington Post, hosted on Rep. Cole’s House.gov page). The waves crested around charismatic candidates and their moments, then receded, because the underlying math never changed.

So here is the second thing we have no control over: when we didn’t give, we weren’t being lazy or indifferent. We were doing the rational thing that nearly every member of a very large group does. Our silence is a predictable feature of a sixty-year-old law of human behavior — not a verdict on our (individual) character. The organized interests who “took over” the process did so precisely because they were few, with concentrated stakes. We are many, with the same diffuse stake. That’s the whole asymmetry, in a sentence.

Part Three: The trap — our anger is being turned against us

There’s a more cruel layer underneath the arithmetic, and it’s the one that should make us angriest — because it turns our own fury into a reason not to take over the processes that appear to silence us.

Political scientists measure something called external efficacy: your belief that government actually listens and responds to people like you.

It’s one of the strongest known predictors of whether a person participates at all. And a 2024 study in Social Science Quarterly found that, across three surveys of nearly 2,800 Americans, attitudes about money in politics were the single strongest predictor of external efficacy among every factor tested — stronger than party, age, income, or political knowledge (standardized effects of roughly 0.24 to 0.32, all highly significant) (✅ peer-reviewed — Social Science Quarterly). The direction is the gut-punch: the more strongly someone believes money dominates politics, the less they believe government responds to them — and it held for Democrats and Republicans alike.

I need to point out: that’s a correlation, not proof of cause, and even this strongest-of-all factor leaves most of what shapes the feeling unexplained — the authors are candid that the drivers of efficacy aren’t well understood. But the association is strong, consistent, and party-blind.

And the feeling isn’t based on anecdotes — it’s measured and well-researched. The same researchers note that members of Congress who take more money from outside their districts are measurably less responsive to the constituents inside them. Step back and the scale is staggering: a dozen individuals supplied about $3.4 billion — roughly 7.5% of all political giving — between 2009 and 2020 (✅ peer-reviewed — Social Science Quarterly, citing Kim 2021). When you suspect the system answers to a handful of large donors instead of to all of us as individuals, we are not imagining things.

Now watch the loop close: Believing the system answers to big money makes us feel unheard. Feeling unheard makes us withdraw — and research on participation finds that low efficacy suppresses the very kinds of participation, including giving, that might push back (✅ peer-reviewed — Journal of Youth and Adolescence). Our withdrawal leads to the small-dollar vacuum. The vacuum lets big money in politics grow louder. And big money growing louder confirms the original feeling. The anger that should fund the alternative instead drains our “participation” tanks — a perfect, self-sealing trap. And we didn’t build it.

So here is the third thing I learned: our anger isn’t hypocrisy, and our silence isn’t weakness. We are responding sanely to a true signal — from a system engineered to make our dollars feel like they don’t matter. The cause isn’t on us for receiving that signal. It’s in the machine that sends it — a machine built over decades out of reform legislation, regulatory rulings, and court decisions, and populated by the organized interest groups that learned to work within it.

What we should actually be angry about — and what we can do about it

Let me separate two things that usually travel together, because keeping them tangled is what wears people out.

The anger is legitimate. The system genuinely is built so that concentrated, organized money speaks louder than an individual voter-donor — and that’s true whether or not we ever wrote a check. The imbalance is real, and worth being angry about.

The individuals did not cause this imbalance. We didn’t break this. We didn’t desert a system we initially funded, because there was never a citizen-funded system to desert. We didn’t fail to rise up out of apathy — we responded, like everyone in a large diffuse group, to arithmetic that makes individual action feel pointless. And when we pulled back from the signals we were receiving, we weren’t failing a test of character — we were reacting to a real signal that indicates the system answers to money, not to us.

Here’s why that matters beyond making us feel better. If the small-donor era were something we lost, fixing it would mean turning back a clock we can’t turn back. But if it’s something we’re only now building — for the first time, with new tools — then it isn’t a restoration project, it’s a construction project. And construction is a choice we make in the present to change our future.

There’s an antidote to that trap, and it isn’t “feel better about money in politics.” The researchers who documented the efficacy collapse are blunt that the fix can’t be asking people to like big money more — they call that inverse argument absurd.

The fix is the real thing the feeling is reaching for: demonstrated responsiveness. And efficacy responds to exactly that — a 2026 study found that direct, face-to-face contact with policymakers measurably raised people’s sense that government listens, but only for those who actually engaged, not those who watched from the back (✅ peer-reviewed — Frontiers in Political Science). Being heard, concretely, by someone who answers — that is what rebuilds the belief that showing up is worth it.

Olson didn’t only diagnose the problem. He described how groups of individuals overcome it: through organization, and by making each person’s contribution feel visible and consequential instead of lost in the ocean of political financial need. That is, almost word for word, what works in small-dollar politics today — the moment that makes a gift feel urgent, the ask from someone we actually know, the running tally that shows where our $25 donation was actually used. None of it changes the “law of large groups.” All of it changes how it feels to be one person inside a large group.

Why I still won’t take a dime of PAC money

I came out of that zero-donations call-time session understanding the temptation toward PAC money better than ever — and more committed to refusing it.

Because the dollar from an organized interest group and the dollar from a human being who decided the candidate is worth twenty-five dollars are not the same dollar, and they never were. The whole apparatus exists because organized money is more efficient than persuaded individuals. But that efficiency carries a structural cost: money raised through any organization — a corporate PAC or a union PAC, whatever its intentions — ties a share of a candidate’s accountability to that organization, rather than directly to the individual people back home. Plenty of candidates take union money in good faith, believing the union speaks for the many — and they may well be right. My choice is simply to keep the line direct: every dollar is from people I answer to, with no organization in between.

The actual human donor — the person who has to be convinced, who gives because they believe something will change — is not the weak link in this system.

That person is the entire point of representative government.

So no PACs. Raising real money without PACs is swimming upstream, since the entire current of modern campaign finance runs the other way, toward the organized money that’s faster to raise and the norm nearly every campaign now expects and accepts.

A campaign funded by the many — one individual at a time — answers to the many. And I want that accountability built in from the first dollar, not promised after the fact.

Raising money from individuals isn’t a guaranteed rising tide. In 2024, small-dollar giving showed real strain: the share of President Trump’s individual fundraising from donors giving $200 or less fell from about 52% in 2020 to under a third, and his small-dollar total dropped roughly 40% (⚠️ secondary — AP/OpenSecrets analysis of FEC data), even as Democratic small-dollar giving held strong. The tide can go out. That isn’t a reason for despair — it’s the reason the word frontier fits this better than the word trend.

The small-dollar donor isn’t a relic. The small-dollar donor is the frontier of campaign finance. And frontiers belong to whoever decides to show up — not because any one of them tips the balance, but because deciding to show up is how a diffuse, angry, exhausted majority stops waiting for someone else to go first.

It’s time for individual donors to walk into the room so we can take control of money in politics.

With gratitude,

Sandra

Please consider giving to my campaign at sandra4cd20.com.

A note on sources, because I owe you transparency about how I know what I claim to know. I’ve marked primary sources — government records and peer-reviewed or scholarly work (.gov, .edu, academic presses) — with ✅, and secondary or reference sources — research organizations, think tanks, news outlets, encyclopedias — with ⚠️. The historical backbone rests on primary records: the FEC’s own PAC counts and SunPAC opinion, and a scholarly account of the CIO-PAC’s founding. The psychology, the efficacy “trap,” and its antidote rest on Mancur Olson’s foundational 1965 text and on recent peer-reviewed journal studies of political efficacy (with reference works cited where they summarize older scholarship). Where I relied on secondary sources, it was generally for trend data or interpretation — and in several cases the secondary source is itself reporting primary data (for example, Pew drawing on the academic American National Election Studies). Everything is linked so you can check me. If a link ever fails, write to me and I’ll send the underlying document.

Sources

• ✅ Federal Election Commission, semi-annual PAC counts, 1974–2000

• ✅ Federal Election Commission, Statistical Summary of 21-Month Campaign Activity of the 2023–2024 Election Cycle (current PAC count)

• ✅ Federal Election Commission, SunPAC advisory opinion / IAM v. FEC

• ✅ Oxford University Press, The Rise of Political Action Committees (CIO-PAC founding)

• ✅ Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Harvard University Press, 1965) — foundational scholarly text

• ✅ Texas higher-education OER, American Government: Collective Action and Interest Group Formation

• ✅ Katherine Haenschen, “The normatively troubling impact of attitudes toward the role of money in politics on external political efficacy,” Social Science Quarterly 105(3), 2024

• ✅ Journal of Youth and Adolescence, reciprocal relationship between participation and political efficacy (2025)

• ✅ Frontiers in Political Science, citizen participation and political efficacy: a town hall study (2026)

• ⚠️ Pew Research Center, 5 facts about U.S. political donations (drawing on ✅ American National Election Studies)

• ⚠️ American Enterprise Institute, The Business PAC Phenomenon: An Irony of Electoral Reform

• ⚠️ Bipartisan Policy Center, Trends in Campaign Financing, 1980–2016

• ⚠️ OpenSecrets, What Is a PAC?

• ⚠️ Encyclopædia Britannica, Federal Election Campaign Act

• ⚠️ Encyclopedia.com, Free Rider (summarizing Olson)

• ⚠️ Washington Post, on the decline of public campaign funding (Obama 2012 small-donor share; hosted on Rep. Cole’s House.gov page)

• ⚠️ PBS NewsHour, Trump’s small-dollar contributions have plummeted since his last campaign (AP/OpenSecrets analysis of FEC data, 2024 cycle)

Paid for by Sandra Van Scotter for Congress.

I cannot confirm any of that information through this platform.

I will gladly accept donations through my campaign donation site at:

https://secure.actblue.com/donate/sandra-van-scotter-ca-20

If you would like to mail a check instead, please mail to:

Sandra Van Scotter for Congress

c/o Sandra Van Scotter

PO Box 1385

Ridgecrest, CA 93556

Please include your name, if you are legally allowed to contribute to a political campaign by being a US Citizen or Legal Permanent Resident, your employer and your occupation.

Even having to type this out is a source of frustration. The tornado of rules and regulations that appear to attempt to control how money enters the political space actually make it easier to do the things we are angry about with money in politics.

More on that in a different article. My current full time job is waiting…

In Solidarity,

Sandra

Paid for by Sandra Van Scotter for Congress-because disclaimers. No PAC money. No chased endorsements. sandra4cd20.com

A few of you, after reading what I wrote about the $1,000 “Trump Account,” asked me a fair question: is there an alternative?

Let me tell you about a program California has already built, one that most families in our district have not yet heard of even though their own children may have money waiting in it right now. It’s called CalKIDS, and the second half of this post puts it side by side with the Trump Account so you can decide for yourself.

First, the thing I most want you to know: CalKIDS is specifically for education and vocational training expenses after high school; and I’ll be just as plain about its limits as I was about the Trump Account’s. It’s free, it’s already yours if you qualify, and far too few families are claiming it.

What CalKIDS actually is

CalKIDS — the California Kids Investment and Development Savings Program — is a children’s savings account program the state launched in 2022. It’s run by the ScholarShare Investment Board, the same state agency that runs California’s official 529 college savings plan. Think of it as a head start on education costs that the state funds — not money you have to put in yourself.

Here’s how a family qualifies. There are two paths:

Every baby born in California. If your child was born in California on or after July 1, 2022, they’re eligible for a deposit between $25 and $175 — regardless of your income. The exact amount depends on when they were born. It’s automatic. The money is set aside; you just have to claim it.

Low-income and high-need public school students. Low-income public school students are eligible for scholarships ranging from $500 to $1,500. This covers students identified as low-income, English learners, foster youth, and similar categories who were enrolled on a specific school “Census Day.”

The potential reach of this program is genuinely large. CalKIDS has been called the nation’s largest child development account program, with roughly $1 billion made available to more than two million California students since 2022. And starting in the 2025–2026 school year, school districts are now required to tell families about CalKIDS and their child’s potential eligibility — which means the schools in Kern, Kings, Tulare, and Fresno Counties are obligated to get this information into parents’ hands. Hopefully, your school districts are already getting the CalKIDS information out to you.

How you claim it — and how it grows

The money is created for your child automatically if they’re eligible, but someone has to claim it. You claim it on the Program portal at calkids.org. For a school-age child you’ll use their Statewide Student Identifier (the SSID — your school can provide it); for a newborn you’ll use the Local Registration Number from the birth certificate (or the unique code on the notification letter the state mails within 90 days of the birth). For a newborn, the advice is to wait up to 90 days after the birth before claiming.

When the time comes, the funds can be used for qualified higher education or career-training expenses — tuition and fees, books and supplies, computer equipment, certain housing expenses. And because CalKIDS lives in California’s 529 system, a family can link it to a ScholarShare 529 account and add their own savings if they choose. You’re not required to add a cent — but if you can, it grows in one place, and qualified education withdrawals come out free of state and federal tax.

That’s the program. Free state seed money for education, no contribution required, and a tax-free path to use it.

CalKIDS vs. the Trump Account — the accurate comparison

Now let me put them next to each other, because it would be easy to think they’re the same type of investment account. They aren’t. They’re built for very different purposes, and once you see that, the rest follows.

One is for your child’s retirement. CalKIDS is for education expenses only. The Trump Account is a traditional IRA — a retirement account. The money is meant to sit untouched for your child’s old age. CalKIDS is an education account — meant to be used when your child is ready for college or career training. That single difference drives almost everything else.

One is locked for decades. CalKIDS is available when your child needs it for continuing their education. The Trump Account allows no withdrawals before your child turns 18 — not even for hardship — and after that it carries a 10% penalty until age 59½. CalKIDS is there when your child is ready to head to college or vocational training after high school. No retirement lock, no early-withdrawal penalty.

One is taxed on the way out. CalKIDS is not taxed on qualified education expenses. When money finally comes out of a Trump Account, the $1,000 seed and all its growth are taxed as ordinary income. The earnings never escape tax. CalKIDS, used for qualified education expenses, comes out tax-free. So a dollar of growth is worth more in CalKIDS than in the Trump Account.

Who owns it — and why that matters so much for a disabled child. This is the part I will never stop emphasizing. In a Trump Account, the child is the owner from day one. That means the account is the child’s own countable asset toward the asset limits for means-tested benefits, and it can push a disabled child over the $2,000 SSI resource limit — costing them access to SSI, and often the Medi-Cal that comes with it. A CalKIDS-linked family 529 account, by contrast, is typically parent-owned, which generally keeps it from threatening the child’s benefits.

But here’s where I need to be accurate: a 529 is not the same as full protection from asset limitations if you need to access disability benefits. For SSI specifically, money in a 529 can count as a resource. The reason a CalKIDS/529 account usually doesn’t hurt a child’s benefits is that a parent/adult owns it — not because 529s are magically exempt. The tool actually built to shield a disabled person’s savings from being considered for asset limitations is an ABLE account, where up to $100,000 doesn’t count against the SSI asset limit, and the funds don’t count against Medi-Cal eligibility at all. If your child has a disability and needs access to means-tested benefits, please talk with a benefits specialist before relying on any of these accounts. That’s not a disclaimer to cover myself — it’s the recommendation I give any family considering any type of investment.

What happens if the money is never used — and here is where CalKIDS is very different. I promised to be as plain about CalKIDS’ limits as I was about the Trump Account’s, so here is the real catch. With CalKIDS, if your child doesn’t use the money for education or career training by age 26 — for any reason, including the child’s death or disability — the state seed and its earnings are forfeited and returned to the program to help another California child. You don’t get it back. There’s a narrow written appeal if there were extenuating circumstances, but the default is: use it for its purpose, or it goes back to the state.

Compare that to the Trump Account, where unused money — even after a death — stays with the family (taxed, and reported on the child’s final return if no beneficiary was named, as I wrote before). So this is the one place the Trump Account is arguably more generous: you can inherit it. With CalKIDS, you never owned it, so there’s nothing to inherit — you simply lose a gift you didn’t use. The difference: CalKIDS costs you nothing and is never taxed; it’s a conditional gift, not property. One important exception — a personal ScholarShare 529 account you open and link to CalKIDS does not expire; that money stays as yours to redirect. So if keeping something regardless is what matters to you, your own linked 529 account — not the CalKIDS seed — is the part that protects your investment.

And one more reason to claim the account, even if you are not sure your child will use it: there is a narrow appeal to use the funds after age 26 if life got in the way — but that appeal is only available if you claimed the account before the 26th birthday. An unclaimed account has no second chance. So claiming it early, even if college is years away, is what keeps every option open.

The ‘seed’ size difference — and the tradeoff. The Trump Account’s one-time $1,000 is larger than the CalKIDS automatic newborn deposit ($25–$175). CalKIDS gives low-income students up to $1,500, requires nothing from the family, comes out tax-free, isn’t locked until retirement, and doesn’t sit on a disabled child’s benefits like an anchor. When I weigh free, flexible, tax-free education money against a larger sum locked in a taxable retirement account my child can’t touch for at least eighteen years, the choice becomes clear for most working families.

What I think — and what we’ll do

I’ll say about CalKIDS what I said about the Trump Account: read it for yourself, and decide what fits your family’s needs. For some, the right answer is to claim CalKIDS and open a ScholarShare 529 account. For a family raising a disabled child, the right answer almost certainly includes opening an ABLE account. For very few Congressional District 20 families is the Trump Account the best of the options on the table.

What troubles me isn’t that these programs exist. I am grateful these programs exist! My sons both qualified for CalKIDS! It’s that the loud one — the one with a President’s name on it — is the least beneficial deal for working families, while the quiet one California already built is sitting unclaimed because you have not heard about it until now.

My job isn’t to represent only Democrats. It’s to represent everyone in California’s 20th Congressional District. And the district office is the instrument I can use to do the most good from day one. From those offices, we will help families navigate exactly these rules — CalKIDS, ScholarShare 529, ABLE accounts, Special Needs Trusts, SSI, and Medi-Cal — so that no family in this district leaves free money on the table, or loses the benefits their child depends on, because the rules were not accessible enough to understand.

Go check if your child has CalKIDS money waiting. Then keep asking questions — of me, and of everyone who wants your vote. I’ll keep answering you honestly.

With gratitude, Sandra

References

All primary sources unless noted. Where a document is paywalled or hard to reach, I’ve said so.

1. CalKIDS — official program site — eligibility, deposit amounts, how to claim, and the 90-day newborn note.

2. CalKIDS — Fast Facts Program Summary (PDF) — the newborn $25–$175 breakdown (initial deposit + $25 claim incentive + $50 ScholarShare 529 link incentive) and the up-to-$1,500 student amounts, in the program’s own words.

3. CalKIDS — Need Help / FAQ — qualified education expenses and the governing California Education Code (EC 69996–69996.9).

4. CalKIDS — Program Information Guide (as of Jan 31, 2026) — “Expiration of CalKIDS Accounts” (age-26 forfeiture, including death or disability), the linked-personal-529 exception, the age-17 withdrawal floor, the newborn vs. school-age claiming methods, and the appeal-only-if-claimed-before-26 condition.

5. CalKIDS — Link a ScholarShare 529 Account — how families add their own savings.

6. California State Treasurer / ScholarShare — CalKIDS Regulations — the governing regulatory text and the tax-free treatment of qualified 529 withdrawals.

7. California Student Aid Commission — CalKIDS — claiming accounts, the low-income scholarship range, and the 2025–26 school-notification requirement.

8. UCLA Financial Aid / CalKIDS Institute at UCLA — school-age eligibility standards.

9. IRS Notice 2025-68 — Trump Account rules: IRA status, the growth-period lock, and ordinary-income taxation of withdrawals. Internal Revenue Bulletin 2025-52.

10. IRS — One, Big, Beautiful Bill Provisions — Trump Account releases and details.

11. Congressional Research Service — Trump Accounts: Overview and Policy Considerations, R48910 — the SSI/means-tested-benefit interaction.

12. ABLE National Resource Center — FAQ — the SSI/Medicaid exclusion and the $100,000 figure.

A note on sourcing: these are state (.gov), federal (.gov), and university (.edu) primary sources, plus the ABLE National Resource Center and CRS. One point — that money in a 529 can count as a resource for SSI specifically — rests on policy analysis I’m still confirming against the Social Security Administration’s own program rules (SSA POMS); I’ll update if the primary source refines it. CalKIDS newborn deposit amounts shift by birth year, so check calkids.org for your child’s exact amount. Trump Account regulations remain proposed, not final.

Paid for by Sandra Van Scotter for Congress. No PAC money. No chased endorsements. sandra4cd20.com

So let’s clarify what this account actually is — because even my own Congressperson is promoting this as something it is not.

The “Trump Account” is not a gift. It’s not college money. It’s not something you can spend on your child (at least not for eighteen years, and even then, not without a cost). It’s a retirement account — a traditional IRA — opened in your child’s name, with one $1,000 deposit from the U.S. Treasury, created under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). That’s the entire government contribution. One time. Everything after that is up to you.

I spent twenty years as a respiratory therapist, and a lot of that work was sitting with families and translating complicated rules — what the insurance covered, what it didn’t, and why the form said one thing while the reality said another. My current full time job is to explain this type of stuff to disabled people and their families. Same conversations, two different audiences. Here is what you need to know to make an informed decision.

What’s true — and the part that sounds good

A child born between 2025 and 2028, who is a U.S. citizen with a Social Security number, can receive a one-time $1,000 Treasury deposit. You file IRS Form 4547 (or use the portal at trumpaccounts.gov), and contributions can begin July 4, 2026. Families, employers, and charities can add up to $5,000 a year. The money grows tax-deferred, invested in a low-cost U.S. stock index fund.

And here’s a distinction the headlines blur, so let me be precise about it: the $1,000 is not for any child under 18. You can open a Trump Account for almost any child under 18 with a Social Security number — but the government’s $1,000 only goes to children born between January 1, 2025 and December 31, 2028. If your child was born before 2025, you can still open the account, but the government puts in nothing — you’d be funding an empty, locked, taxable IRA entirely yourself. So for most children already living in our district, the “$1,000 for your baby” promise delivers exactly zero dollars.

If you have $5,000 a year to spare and you’re thinking decades ahead, I understand the appeal. The following is what comes with opening this account.

The part that worries me

It’s locked — and then it’s penalized. No withdrawals before your child turns 18, not even for a hardship. After 18 it becomes an ordinary IRA, and taking money out before age 59½ generally triggers a 10% penalty. So a family imagining this as a fund for a first car, a first apartment, or tuition is going to meet taxes and penalties they never saw in the headline.

The tax is worse than the alternatives. When the money finally comes out, the $1,000 seed — and all the growth on it — is taxed as ordinary income. Only the after-tax dollars your family put in come back tax-free. Compare that to a 529 plan (where money spent on education comes out completely tax-free) or a Roth IRA. The Trump Account’s earnings never escape tax. The “free” $1,000 is taxable on the way out.

Somebody has to keep the records for eighteen years. The account mixes pre-tax money (the government’s $1,000, any employer dollars) with after-tax money (what your family contributes). If no one tracks which is which over those years, your child can end up taxed twice on the same dollars — the money your family already paid taxes on before you contributed to this account.

The part I will not let any family miss

I’m a Disability Community Advocate, and here is where I need you to really pay attention:

If your child becomes disabled, this account can actively hurt them.

Here’s why. A Trump Account is a countable asset — and the child is the actual owner of this account. Supplemental Security Income (SSI) has a resource limit of $2,000, a number that has not been raised since 1989. A Trump Account that grows past that limit can disqualify a disabled child from SSI — and in most states, losing SSI means losing the Medicaid that comes with it.

That’s the exact opposite of how the tools built for disabled people are supposed to work. An ABLE account is designed to be invisible to those tests (up to $100,000 in an ABLE account doesn’t count against the SSI limit). A Special Needs Trust does the same job another way. A Trump Account does neither — it sits right on top of the resource limit and counts against your child.

Congress did build one way out — and I’d gently point out that the ‘out’ is so narrow most families will never hear about it in time. You can roll a Trump Account into an ABLE account, but only during the one calendar year your child turns 17 — not before, not after. It has to be a direct trustee-to-trustee transfer. Think about what that means. If your child becomes disabled at 3, you’re holding a countable asset that can cost them SSI and Medicaid for the next fourteen years, with no way to move it until that single year arrives. And if your child becomes disabled at 18 or later, the window has already closed for good — the money is stuck in a countable IRA with no clean way out. Nothing in the sign-up process warns you. Nothing flags the rollover year. You simply have to already know.

And the question no parent wants to ask

Someone asked me what happens to the account if a child dies before turning 18. It’s the most difficult question a parent can ask — and the families I care for taught me that you answer difficult questions honestly. There is no talking around them.

Under the IRS guidance (Notice 2025-68, Q&A E-4, carrying out section 530A(d)(6) of the law), if a child dies before 18, the account stops being a Trump Account — and stops being an IRA — as of the date of death. It’s treated as though everything was cashed out that day. The $1,000 and all the growth are taxable as ordinary income. There’s no early-withdrawal penalty in that case — a small mercy. But there is a tax bill. And if no beneficiary was ever named on the account, that bill is reported on the child’s own final tax return, and the money passes through their estate.

I want to be fair here: a parent can name a beneficiary when the account is opened, and doing so is strongly advised, precisely so the money goes where the family intends. But the default — doing nothing — routes it through the estate. No grieving family should be learning that in probate.

What I think — and what we’ll do

I’m not going to tell you never to open one of these accounts. That’s your decision, and for some families — with money to spare and a long horizon — it might be appropriate. What I am telling you is that this account was named to sound like a gift to working families, and for the working families of Kern, Kings, Tulare, and Fresno Counties — the ones who can’t spare $5,000 a year, the ones raising a child with a disability — it delivers the least and risks the most.

That’s the pattern I keep finding when I read the fine print on what passed in Washington. The headline is written to sound good and beneficial to you. The fine print is not.

My job isn’t to represent only Democrats. It’s to represent everyone in California’s 20th Congressional District. And the district office is the instrument I can use to do the most good from day one. From that office, we help families navigate exactly these rules — SSI, Medicaid, ABLE accounts, Special Needs Trusts — so that no family in this district loses the benefits their child depends on because someone wrote the fine print to be missed. That’s not a promise about a vote count in Washington I can’t control. It’s a promise about the work we will start on day one, for the people we are elected to serve.

Life keeps getting more complicated. Keep asking questions — of me, and of everyone who wants your vote. I’ll keep answering you honestly.

If you have questions about this or you see something I missed, or needs clarification or correction, leave a comment below.

With gratitude,

Sandra

References

All primary sources. Where a document is paywalled or hard to reach, I’ve said so.

1. IRS Notice 2025-68, Notice of intent to issue regulations with respect to section 530A Trump accounts — the death-of-beneficiary rule is at Section III.E, Q&A E-4, and section 530A(d)(6); the age-17 ABLE rollover window is at Q&A E-3 and section 530A(d)(4)(B). Published in Internal Revenue Bulletin 2025-52.

2. IRS (IR-2026-31), Treasury, IRS issue proposed regulations for Trump Accounts contribution pilot program

3. IRS, One, Big, Beautiful Bill Provisions — the hub tracking every Trump Account release and the signup numbers.

4. Federal Register, Trump Accounts (proposed rule, March 9, 2026) — defines the growth period and distribution restrictions.

5. IRS, Instructions for Form 4547, Trump Account Election(s) — confirms the child is the account owner/beneficiary.

6. Congressional Research Service, Trump Accounts: Overview and Policy Considerations, Report R48910 — means-tested benefit interactions; the age-17 ABLE rollover window.

7. ABLE National Resource Center, Frequently Asked Questions — the SSI/Medicaid exclusion and the $100,000 figure.

8. The Arc, ABLE Accounts Expanded in 2026 — secondary source, reliable for disability policy; 2026 ABLE eligibility and the $20,000 contribution limit.

9. Rep. Vince Fong, video remarks on Trump Accounts (Facebook reel) — the incumbent’s own promotion of the account, referenced above.

A note on sourcing: items 1–7 are .gov and primary regulatory sources. Item 8 (The Arc) is a disability-advocacy organization — a secondary source I rely on for plain-language framing of ABLE rules, cross-referenced against the primary IRS and CRS documents. Item 9 is the incumbent’s own public statement, linked as a primary record of what he said. The underlying Trump Account regulations are still proposed, not final; Treasury intends to publish final rules within 18 months of enactment, so specific mechanics may change. I’ll update this if they do.

Paid for by Sandra Van Scotter for Congress-because disclaimers. No PAC money. No chased endorsements. sandra4cd20.com