Freedom Accounts Act of 2027

This Act may be cited as the “Freedom Accounts Act of 2027.”

Congress finds that:

(1) Covered federal social spending since the Second World War has been large, and too often ineffective: programs grew while poverty, homelessness, and NAEP outcomes for too many students did not improve in proportion to the money spent.

(2) Ownership is a check on concentrated power. An account a person owns is different from a benefit an agency may condition or delay.

(3) The Tenth Amendment reserves education and most domestic police power to the States. Federal dollars should follow the person, not a middleman.

(4) The executive power is vested in the President (Article II). Congress holds the purse and oversight (Article I). Courts interpret (Article III). This Act does not authorize a line-item veto.

(5) Saving unused balances, instead of spending them because the fiscal year is ending, should credit the People.

In this Act:

(1) Freedom Account means the individual beneficial account held in the Trust for an eligible person.

(2) Freedom Accounts Trust or Trust means the trust established in section 201.

(3) Eligible person means a United States citizen or lawful permanent resident who has completed verification under Title III.

(4) Secretary means the Secretary of the Treasury.

(5) State includes the District of Columbia and each State of the Union.

(6) Covered social program means a federal program, appropriation, or pass-through for poverty, housing or homelessness, cash or in-kind welfare, food assistance, workforce training, covered healthcare as defined in Title IX, or elementary, secondary, or higher education that does not follow the student through a Freedom Account. It does not include programs excluded by section 1603.

(7) Unobligated amount means appropriated budget authority not yet obligated.

(8) Lookback period means, for the first designation year after enactment, the 10 fiscal years immediately preceding enactment for homelessness, poverty, education, and covered healthcare outcomes; and for every later year, the 3 fiscal years immediately preceding the designation.

(9) Freedom Account Number or FAN means the unique identifier issued under section 302.

(10) Qualified healthcare expense means a premium, cost-sharing amount, or medical care payment permitted by Treasury rule, consistent with section 902.

(11) Primary residence means one owner-occupied dwelling that is the person’s principal home.

(12) NGO means a nongovernmental organization receiving federal funds to administer a covered social program.

(a) There is established the Freedom Accounts Trust, a public trust for the exclusive benefit of eligible persons.

(b) The Secretary is Trustee and Chair of the Board. Trust principal and earnings are not general fund revenue. Congress shall not appropriate Trust assets for any purpose other than the beneficiaries. Any Member, officer, or employee who knowingly directs Trust assets to another purpose shall be subject to the penalties in section 1505.

(c) The United States holds legal title. Beneficial ownership is in the individual Freedom Accounts.

(a) The Secretary shall open one Freedom Account for each eligible person.

(b) An account is personal property of the eligible person, subject to this Act. It passes at death to the person’s designated beneficiary or, if none, by applicable State law.

(c) Social Security wage-base amounts credited under Title IV are the opening floor of the account and are guaranteed as provided in that title.

A Freedom Account is not an entitlement to a new appropriated benefit beyond amounts lawfully credited under this Act. It is beneficial ownership of capital placed in the Trust.

Only a United States citizen or lawful permanent resident may hold a Freedom Account. Presence without lawful status does not create eligibility.

(a) Every person registering for a Freedom Account shall present: (1) a certified United States birth certificate, Consular Report of Birth Abroad, Certificate of Naturalization, or Certificate of Citizenship, or a valid unexpired United States passport; and (2) a valid government photograph identification; and (3) a Social Security number that matches the person.

(b) Upon verification, the Secretary shall issue a Freedom Account Number. English is the language of registration instruments.

(c) A parent or legal guardian registers a minor and verifies the minor.

(a) A person who is not a citizen or lawful permanent resident and who registers or attempts to register for a Freedom Account is ineligible for a grant of or continued lawful residence in the United States, in addition to other criminal and civil penalties.

(b) A person who causes another person to register or attempt to register who is not eligible is subject to the same immigration consequence as applicable, and to criminal and civil penalties under section 1505.

(a) Not less than once every 10 years, and at first setup, each account holder (or parent of a minor) shall verify citizenship or lawful permanent residence through the account system.

(b) Failure to complete verification within 90 days after notice suspends new contributions for the unverified period. Those contributions are not restored. They are redistributed among verified eligible accounts.

(c) The Secretary may use this verification in lieu of a separate door-to-door citizenship canvass for Trust purposes. Census employees acting under this Act shall verify citizens and lawful residents for Trust eligibility; they shall not enroll ineligible persons.

(a) The Secretary shall maintain a public tip line for suspected ineligible registration or Trust fraud.

(b) A whistleblower whose tip leads to a sustained finding of ineligible registration or Trust fraud may receive an award of not more than 10 percent of the amount recovered for the Trust, from recovered funds, subject to Treasury rule. Fraud against the Trust takes from every account.

Amounts an eligible person has paid into Social Security as of the date of enactment, and the benefit already determined for a person in current pay status, remain guaranteed. Those amounts are the base of the person’s Freedom Account and shall not be reduced by investment loss.

(a) A person already receiving Social Security, and a person within 10 years of Social Security full retirement age on the date of enactment, may elect— (1) to remain in the guaranteed Social Security benefit only; (2) a 50/50 blend of the guaranteed benefit and Freedom Account participation; or (3) full conversion of future covered amounts into the Freedom Account, retaining the paid-in floor.

(b) Silence after a one-year election window is treated as paragraph (1) for persons described in subsection (a).

For an eligible person not described in section 402, future covered payroll amounts and covered social credits under this Act accrue to the Freedom Account. The paid-in Social Security floor remains guaranteed.

Congress shall not appropriate Social Security or Freedom Account balances to any other program.

Amounts this Act directs to Freedom Accounts are investment of the beneficiary, not agency spending.

(a) For covered social programs, Congress shall, over a period equal to the number of full years from the end of the Second World War to the date of enactment (the “spread period”), credit to the Trust covered amounts not less than the inflation-adjusted, population-adjusted equivalent of covered outlays of those programs over that historic period, excluding section 1603 functions.

(b) Annual credits shall be spread across the spread period. They shall not be dumped in a single fiscal year.

(c) The Secretary, with CBO, shall publish the annual schedule using CPI-U (or successor) and resident-population adjustment.

Congress continues to pass appropriations. For a covered social program, the amount enacted may be— (1) obligated for a still-effective program that has not been designated and approved as ineffectual; or (2) credited to Freedom Accounts when this Act so requires (year-end lapse, approved ineffectual designation, asset proceeds, or scheduled investment under section 502).

After an amount is credited to a Freedom Account, the person may spend it only for a permitted use or leave it invested. Treasury bill-pay shall pay a qualified vendor the person selects. The remainder stays invested.

Designated federal real property and the federal share of oil, gas, and mineral proceeds from public lands shall be listed or unitized in a publicly traded or publicly reported Real Property and Minerals portfolio of the Trust. Operations of national security on a site may continue. The physical asset, when designated, is Trust corpus and is not “national security” for that reason alone.

(a) Public access continues until Congress authorizes closure or conveyance of a parcel.

(b) There is no fire-sale mandate. When Congress authorizes closure or sale, net proceeds are credited to the Trust.

(c) The Trust may borrow against the portfolio on commercially reasonable terms to credit accounts, without pledging an individual account as security.

When a military installation is closed under law, the Trust may develop or dispose of the surplus real property for the benefit of Freedom Accounts, subject to environmental and national-security deed restrictions Congress requires.

A State may convey State real property or mineral interests into a parallel State sleeve of the Trust for that State’s eligible residents.

Before age 62, a withdrawal or bill-pay is permitted only for— (1) a primary residence; (2) qualified education expenses under Title VIII; (3) qualified healthcare expenses under Title IX; (4) water, electric, and similar essential utilities for the primary residence; (5) legal defense of the account holder in a criminal or civil matter in which the person is a party; and (6) a voluntary donation under section 703.

Beginning at age 62, the person may withdraw for any lawful purpose, subject to ordinary tax rules Treasury publishes. Unused healthcare and other permitted amounts that were not spent remain in the account and increase the balance available at 62.

A person may donate from the account to a person or organization the person chooses. Federal covered social spending shall not be routed through NGOs as a substitute for this choice. A donation is voluntary.

Account funds may be applied to purchase, down payment, or lawful closing costs of one primary residence, without a separate federal housing bureaucracy as a condition of the payment.

Covered federal education amounts credited to a minor’s or student’s Freedom Account may be directed by the parent or eligible student to the public school district, private school, or home program the family selects under State law. If a district is failing the student, the parent may move the dollars by enrolling the student in accordance with State law.

Nothing in this Act authorizes the Secretary of Education to set curriculum. Education remains a State and local power.

(a) Additional covered education credits may be paid to or for a district, private school, or home program that operates a bona fide year-round instructional calendar meeting State instructional-hour rules.

(b) A participating public district shall use the increased support so that the average full-time classroom teacher compensation is not less than $90,000 in 2027 dollars, adjusted thereafter by CPI-U, provided the teacher’s assignment is instruction. Extra-curricular administration is not “teaching” for this premium.

(c) A teacher suspended for failure to meet professional instructional standards loses Freedom Account contributions for the suspension period. Those amounts are redistributed under Title XV.

Qualified education expenses include State-lawful youth sports and structured activities that keep a minor in supervised programs. This does not create a federal sports ministry.

A school or district that adopts year-round instruction and published behavior standards may receive the incentive in section 803. Gaming the calendar or attendance counts is subject to clawback plus 5 percent under section 1504.

“Covered healthcare program” means federal spending for Medicaid, premium or cost-sharing subsidies under the Patient Protection and Affordable Care Act, federal public-health grants administered as social spending, and any NGO or State pass-through of those funds. It does not include military medical operations, Department of Veterans Affairs hospital operations, Medicare benefits for a person already eligible by age or disability at enactment, or emergency uncompensated-care amounts Congress expressly preserves.

An eligible person may direct Freedom Account funds to qualified healthcare expenses through Treasury bill-pay. A qualified healthcare payment is not a taxable distribution solely because it is paid from the account.

Amounts available for healthcare that the person does not spend remain in the Freedom Account, remain invested, and are not recaptured because the person was healthy or used less care. There is no use-it-or-lose-it inside the account. A person who uses less before age 62 has a larger balance at 62.

GAO shall certify covered healthcare programs against one or more of the following, as published by CDC, NCHS, or CMS for the lookback period: (1) preventable hospitalizations or emergency-department use for the served population; (2) age-adjusted mortality or life expectancy for the served population; (3) real federal cost per beneficiary compared with those outcomes.

This title does not cut a Medicare benefit of a person already entitled at enactment or within the protection window of section 402 as Treasury shall align.

Covered social spending that cannot show a measurable result shall not continue as spending. If Congress approves a designation under this title, the unobligated amount is rescinded and credited to Freedom Accounts.

“Ineffectual spending” means the unobligated amount of a covered social program (including a covered healthcare program) that meets any of the following in the lookback period:

(1) The Government Accountability Office or the agency Inspector General identifies fraud, waste, abuse, duplication, or a spend-it-or-lose-it obligation made to avoid lapse;

(2) Inflation-adjusted federal spending for the program increased or did not decline, and the statutory outcome did not improve;

(3) The program has no statutory outcome metric published for the lookback period; or

(4) Cost per unit of the statutory outcome increased while the outcome stayed flat or worsened.

(a) Homelessness: HUD Point-in-Time total homeless count, or the unsheltered count.

(b) Poverty, welfare, or income-support: official poverty rate or deep-poverty rate for the served population (Census Bureau).

(c) K–12 or Department of Education funding that does not follow the student: NAEP percentage at or above Proficient in reading or mathematics, or the percentage below NAEP Basic (NCES).

(d) Job training: employment or earnings of completers against the published baseline.

(e) Covered healthcare: section 904.

(f) NGO pass-through: an identifiable beneficiary who owns the result. Money that stops at the NGO fails.

The Comptroller General shall, by September 15 of each year, publish a certification of covered social programs that meet section 1002, the unobligated amount reasonably available, and the data used. The President may designate under this title only a program so certified, or a program for which an Inspector General has issued a finding under section 1002(1).

The President may transmit to Congress a special message designating certified unobligated amounts as ineffectual spending. The message shall identify each program, the test failed, the GAO or Inspector General source, and the dollar amount.

(a) Congress shall consider the message under expedited procedures comparable to a rescission bill under the Impoundment Control Act of 1974.

(b) If Congress, within 45 days of session, approves the designation in whole or in part, the approved unobligated amount is rescinded and shall be credited to Freedom Accounts.

(c) If Congress rejects the designation, or does not approve it within that period, the appropriation stands.

(d) This title is not a line-item veto and does not authorize the President to amend an appropriations Act without a vote of Congress.

Amounts rescinded under section 1006(b) are Trust capital, allocated to eligible Freedom Accounts under the same rules as other covered credits. They are not available to any agency for obligation.

Unobligated balances of covered social programs at the end of the fiscal year shall be credited to Freedom Accounts. An agency shall not obligate solely to prevent lapse.

Even for functions excluded from Trust capital under section 1603, identified waste, unused year-end balances, and sustained GAO or Inspector General waste findings shall be credited to Freedom Accounts. Operational capability of those functions is not reduced by this section except as Congress separately provides. The incentive is to stop wasting money, including in national security and defense administration.

Identified unused balances in a covered program during the year, not only at year-end, may be transferred to Freedom Accounts by the Secretary upon GAO or Inspector General notice, subject to section 1006 if the amount is part of an ineffectual designation.

Trust capital shall be invested only in— (1) broad United States equity index funds consistent with the Standard & Poor’s 500 or a successor broad large-cap index; (2) listed small- and mid-capitalization United States equity index funds; (3) investment-grade United States Treasury and investment-grade listed bond funds; and (4) listed real estate funds, including listed REITs and listed international REIT funds.

Private funds, unlisted real estate funds, single-name speculation by the Trustee, and political or social overlay mandates that override beneficiary return are prohibited.

Treasury shall publish a default age-based mix. A person 18 or older may elect among the permitted options. Minors use the default unless a parent elects otherwise.

The Board of Trustees is the Secretary of the Treasury as Chair and the chief financial officer or treasurer of each participating State. The Board executes the Trust instrument. It does not spend Trust capital on State general funds.

States enroll persons, record suspensions and removals, and run day-to-day account operations under Treasury standards. A State sleeve may receive that State’s conveyed assets.

A management fee of 0.75 percent of gross account value credited in the fee year (not of a net-present-value construct) is charged. The fee is split between the Treasury and the States as Treasury rule provides, and is paid to those governments for administration. The fee is not an appropriation of Trust principal to unrelated programs.

A State that conveys assets and administers enrollments may, by compact with the Secretary, substitute Trust units credited to that State’s residents for specified State unfunded social or retirement obligations, as the compact states. Federal core functions are not assumed by the State.

A Freedom Court is a specialized docket, not a replacement for Article III. Civilian cases are heard by a United States district judge or a State judge of competent jurisdiction designated for this docket. Military cases are heard by a military judge. Commanders and immediate supervisors shall not sit on, staff, or control a Freedom Court.

The docket hears whistleblower and reprisal claims arising from this Act or from retaliation by a federal agency (including the armed forces) against a person who reported waste, fraud, abuse, or a violation of law related to the Trust or to covered funds.

The agency shall investigate and issue a written report within 90 days after a covered complaint is filed. If the agency finds retaliation, it shall remedy the matter. The complainant retains the right to appeal to a Freedom Court at no filing cost.

If the agency does not issue the report within 90 days, the Freedom Court may issue a default ruling limited to: (1) a finding that the agency failed to report; (2) interim relief necessary to stop ongoing reprisal; and (3) an order that the record be opened and the report filed within a court-set period. Default does not award unlimited damages without a later hearing on the merits unless the court finds willful refusal after order.

The standard is preponderance of the evidence. Appeal is to the appropriate court of appeals on questions of law and constitutionality. District courts not sitting on this docket do not take a parallel case on the same claim.

If reprisal is substantiated, the panel may recommend victim compensation in an amount the panel finds just, without a statutory cap. Funding is from the Treasury and the budget of the offending agency. A portion, as the court sets and not to exceed the offender’s available Freedom Account balance beyond the guaranteed Social Security floor, shall be debited from the Freedom Account of a person found personally responsible. That debit is separate from employment discipline.

No person shall be discharged, demoted, suspended, threatened, harassed, or denied a Freedom Account contribution because the person made a lawful report. Interference with a whistleblower is a violation of section 1505.

An eligible person convicted of a crime under federal or State law shall have new contributions suspended for the period of incarceration. A person sentenced to life without parole is not eligible for new contributions; those amounts are redistributed to eligible accounts. The paid-in Social Security floor is not forfeited.

(a) For each school day of suspension, a minor’s monthly covered contribution is reduced by $1.

(b) For each month of expulsion, an additional $50 is withheld.

(c) Reductions under this section are permanent and are not restored after the discipline ends. Withheld amounts go to the Trust for redistribution to eligible accounts.

(a) Law enforcement officers and judges shall administer and enforce the law in accordance with the Constitution of the United States.

(b) A person in such office found, by a court of competent jurisdiction or by a State legislative or congressional ethics process, to have failed to enforce the law in a fair and impartial manner consistent with the Constitution may be fined $1,000 per act and may have Freedom Account contributions suspended for 12 months per finding.

(c) A State legislature or Congress that, by ethics process or court of competent jurisdiction, is found to have failed to act in a fair and impartial manner consistent with the Constitution may subject the responsible Members to the same fine and 12-month contribution suspension.

A person or institution that games enrollment, attendance, year-round status, verification, or outcome data to obtain credits under this Act shall restore the amount obtained plus 5 percent. The addition is Trust capital. All accounts and institutional claims are subject to audit.

A person who manipulates, abuses, or improperly impacts Trust operations, who directs Trust assets to a non-beneficiary purpose, or who interferes with verification or whistleblowing shall be subject to criminal and civil penalties for breach of the public trust, including restitution to the Trust and contribution suspension.

Forfeited and withheld contributions under this title are credited to eligible, verified accounts and are not returned to the offender.

English is the official language of the Freedom Accounts Trust, of registration, of statements, of the November 1 report, and of instruments under this Act. A State may provide a courtesy translation. The controlling text is English.

Not later than November 1 of each year, the President shall publish a report stating, in total and per eligible person: (1) Trust and aggregate account value; (2) year-end spend-it-or-lose-it credits; (3) real property and mineral credits; (4) ineffectual-spending amounts designated, approved, and rejected; (5) healthcare and education bill-pay totals; (6) the 0.75 percent fee; and (7) guaranteed Social Security floors versus invested balances.

Funds required for national defense and national-security operations, for homeland-security operations, for law enforcement and justice operations (including the Federal Bureau of Investigation, Drug Enforcement Administration, United States Secret Service, and Bureau of Prisons operations), and for interstate and international commerce operations shall not be taken as Trust capital merely because this Act exists. Real property and mineral wealth are not national security for purposes of the Trust solely by reason of federal title. Operations on a site may continue; the designated physical asset and its authorized proceeds may still be Trust corpus.

(a) Titles II, III, VI, XIII, and XVI take effect on enactment.

(b) Real property designation and monetization may begin immediately as Congress authorizes parcels.

(c) Covered education, Social Security transition, poverty, and healthcare credits phase in over five years as the Secretary publishes.

The Trust shall be audited annually by GAO. Each account statement shall state whether the period has been included in a completed audit. A person who fails verification under section 304 loses contributions for the unverified period without restoration.

If any provision of this Act is held invalid, the remainder shall be given effect.

Except as provided in section 1604, this Act takes effect on January 1, 2028.