Twenty-three state treasurers, auditors and comptrollers asked the IRS on October 20 to lock ESG-focused funds out of the new Trump Accounts for children, framing sustainable investing as a political filter that belongs nowhere near a child's savings. The letter, obtained by Redstate, backs proposed Treasury regulations that would restrict the accounts to low-cost index funds, with annual fees capped at 0.1 percent.
The move lands on the same day as the IRS deadline for public comments on the rules, and it marks the latest salvo in a multi-year conservative campaign against environmental, social and governance investing. Critics of that campaign say it sacrifices long-term returns and climate risk management to score political points, and that the decision of what counts as political is being made by the very officials who profit ideologically from the fight.
What the state officials are asking the IRS to do
The letter supports regulations that the Treasury Department and the IRS proposed in August. Under those rules, Trump Accounts would generally be limited to low-cost funds tracking broad American stock indexes. The officials argue that ESG screening introduces considerations Congress never intended, and they draw a direct analogy to sector funds, which Congress has already excluded from the program.
According to Redstate, which first reported the letter, the officials wrote that an account should hold broad, unfiltered exposure to the domestic equity market at the lowest available cost, with no judgment required of the beneficiary. An index that selects or weights companies on ESG criteria departs from that principle, they argued, because inclusion turns on something other than participation in the broad market.
The signatories also urged the IRS to exclude funds that simply market themselves as ESG investments, and to base the final rule on how funds are structured rather than on debates over whether ESG strategies outperform. They asked for clearer disclosures identifying default investments and explaining how parents can switch to another eligible fund, a detail that matters for families who may leave the money untouched for years.
Who signed the letter
Signatories include Arizona Treasurer Kimberly Yee, Kansas Treasurer Steven Johnson, Pennsylvania Treasurer Stacy Garrity and Utah Treasurer Marlo Oaks, who also chairs the State Financial Officers Foundation. The foundation's CEO, OJ Oleka, was blunt about the stakes as he sees them.
ESG might as well stand for Everything Stops Growing, Oleka said in a statement to Redstate, adding that the accounts should not get tangled in what he called outdated woke activism.
Oaks offered a more measured version of the same argument, saying the money belongs to American children and must be managed solely in their financial interest, not to advance someone else's political agenda.
What Trump Accounts actually are
The Trump Accounts program provides $1,000 in federal seed money for eligible children born between 2025 and 2028, and families can contribute more over time. The official program site,