Twenty-three state treasurers, auditors, and comptrollers asked the Internal Revenue Service on October 20 to finalize rules that would exclude ESG-screened funds from Trump Accounts, the new federal investment program for American children, according to Redstate, which obtained the letter exclusively.
The letter backs proposed Treasury and IRS regulations issued in August that would restrict the accounts to low-cost funds tracking broad U.S. stock indexes, with annual fees capped at 0.1 percent. The officials argue that environmental, social, and governance screening injects criteria Congress never authorized into a program designed to give children simple, unfiltered market exposure.
The Structural Argument Against ESG in Trump Accounts
The core of the officials' case is architectural rather than ideological. An investment protocol should define its selection rules once and apply them without discretionary override. The letter, as quoted by Redstate, states:
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. 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.
Congress already excluded sector-specific indexes from the program. The officials apply the same logic to ESG: both filter on criteria unrelated to broad market participation. In protocol terms, an ESG screen is a hard fork of the index. It changes consensus rules without the account beneficiary signing off on the change.
The letter also urges the IRS to base its final decision on how funds are structured, not on debates over whether ESG portfolios outperform conventional ones. Performance claims are irrelevant if the mandate itself excludes non-market selection criteria, the officials contend.
Who Signed and What They Said
Signatories include Arizona Treasurer Kimberly Yee, Kansas Treasurer Steven Johnson, Utah Treasurer Marlo Oaks, and Pennsylvania Treasurer Stacy Garrity, according to Redstate. OJ Oleka, CEO of the State Financial Officers Foundation, did not mince words in a statement to the outlet.
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 of 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 the State Financial Officers Foundation, framed the issue as a fiduciary boundary condition.
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.
How the Trump Accounts Protocol Works
The program, launched through trumpaccounts.gov, provides $1,000 in federal seed money for eligible children born between 2025 and 2028. Families can contribute additional funds, and the assets compound over decades before the beneficiary reaches adulthood.
Treasury has already selected a default investment: an S&P 500 exchange-traded fund run by State Street, according to reporting archived by The Times and available via