The concept of “Trump Money,” born from a social media suggestion, has captured the attention of the White House, with former President Donald Trump expressing enthusiastic support. The idea revolves around channeling a portion of the savings from government spending cuts, spearheaded by Elon Musk’s efficiency drive, directly back to American taxpayers.
“I love it,” Trump stated on Air Force One, responding to a question about this novel proposal.
Advocates of this plan suggest that if Musk achieves his ambitious target of $2 trillion in government spending reductions by next year, approximately one-fifth of these savings could be distributed to taxpaying households in the form of checks, potentially amounting to around $5,000 per household.
WATCH: How Elon Musk gained so much power in the Trump administration
However, before taxpayers start anticipating a financial windfall, it’s crucial to consider the expert opinions. Budget analysts express considerable doubt about the feasibility of achieving such massive savings, which would represent nearly a third of the federal government’s annual expenditure. Furthermore, economists caution that distributing another round of checks, reminiscent of the stimulus payments issued during the pandemic under both Trump and President Joe Biden, could potentially reignite inflationary pressures. Despite these economic concerns, White House officials have downplayed the inflation risk.
Adding another layer of complexity, the annual budget deficit stood at a staggering $1.8 trillion last year, and with Trump proposing significant tax cuts, there’s considerable pressure to prioritize deficit reduction over distributing savings to taxpayers.
Let’s delve deeper into the specifics of this “Trump money” proposal and examine its potential implications.
The Genesis of “Trump Money”: From Social Media to the White House
The “Trump money” idea originated from James Fishback, the founder of Azoria Partners, an investment firm launched at Trump’s Mar-a-Lago estate. Fishback promoted the concept on X (formerly Twitter), which garnered a response from Elon Musk, who indicated he would “check with the president.” Fishback has also stated that discussions about this proposal have been ongoing “behind the scenes” with White House officials.
Musk’s Department of Government Efficiency (DOGE) has claimed to have already achieved $55 billion in spending cuts. However, this figure represents a small fraction of the $6.8 trillion federal budget. Moreover, DOGE’s public statements regarding these savings have not been independently verified. Claims made by DOGE, such as allegations of tens of millions of deceased individuals fraudulently receiving Social Security benefits, have been debunked.
READ MORE: Social Security head steps down over DOGE access of recipient information, AP reports
Fishback advocates for an independent assessment of DOGE’s savings by the nonpartisan Congressional Budget Office (CBO). He suggests that if DOGE manages to cut $500 billion by July 2026, the resulting checks would be closer to $1,250 per household, rather than the initially proposed $5,000.
In an interview with The Associated Press, Fishback explained, “We uncovered enormous waste, fraud and abuse. And we are going to make good and pay restitution and then rewrite the social contract between the taxpayer and the federal government.”
Fishback argues that distributing checks to taxpayers, rather than solely focusing on deficit reduction, would incentivize citizens to identify and report wasteful government spending within their communities to DOGE.
“Trump Money” Timeline: When Could Taxpayers Expect Checks?
It’s important to manage expectations regarding the timeline for potential “Trump money” payouts. According to the current proposal, DOGE’s efficiency review is projected to be completed by July 2026. Following this, any realized savings could be distributed later that year to approximately 79 million households that pay income taxes. It’s noteworthy that around 40% of Americans do not pay income taxes and would therefore not be eligible for these checks.
The Feasibility of Massive Government Savings: Expert Skepticism
A significant point of contention surrounding “Trump money” is the sheer scale of savings that DOGE aims to achieve. Many economists and budget experts are highly skeptical that focusing on “waste, fraud, and abuse” can yield substantial reductions in government spending. Efforts to eliminate “waste” in government have been a recurring theme across administrations from both political parties for decades, with limited success in significantly reducing the deficit.
READ MORE: Fact-checking Trump and Musk’s claims that they are cutting government ‘fraud and abuse’
One of the Trump administration’s prominent actions to date has been the reduction of tens of thousands of government jobs. However, experts argue that such measures are unlikely to generate substantial savings.
Douglas Elmendorf, former director of the Congressional Budget Office, points out, “Only a small share of total spending goes to federal employees. The big money is in federal benefits and in federal taxes and those are not in DOGE’s purview.”
In a Brookings Institution essay published in November, political scientist John DiIulio Jr. from the University of Pennsylvania, highlighted that “eliminating the entire federal civilian workforce would leave in place about 95 percent of all federal spending and the $34 trillion national debt.’’ DiIulio further noted that government contractors and nonprofits receiving federal funds employ three times more people than the federal government’s 2.2 million employees.
Furthermore, the sustainability of any savings achieved without Congressional legislation remains uncertain.
Elmendorf explains, “Firing someone doesn’t save money until Congress comes back and reduces the appropriation for that employee’s agency. If you fire somebody but leave the appropriation where it is, then … that money can be spent on something else. So DOGE can’t really achieve savings until there’s legislative change as well.”
Inflationary Concerns: Would “Trump Money” Fuel Price Increases?
A crucial economic consideration is whether distributing “Trump money” checks would contribute to higher inflation. Trump and his economic advisors have previously criticized President Biden’s $1,400 stimulus checks, issued in the spring of 2021, for contributing to a significant surge in inflation. However, they argue that “Trump money” checks, derived from reduced government spending, would not have the same inflationary effect.
Kevin Hassett, former director of the White House’s National Economic Council, argues that since the money would have been spent by the government anyway, redirecting it to consumers would be a neutral event in terms of inflation. He distinguishes “Trump money” from pandemic stimulus checks, which were deficit-financed and therefore potentially more inflationary.
[ANALYSIS: How will inflation, interest rates and the U.S. consumer fare in 2025?](https://www.pbs.org/newshour/economy/analysis-how-will-inflation, interest rates and the u.s. consumer fare in 2025)
However, Ernie Tedeschi, director of economics at the Yale Budget Lab and former economist in the Biden White House, disagrees. He asserts that additional government checks are “the last thing we need economically right now.”
Tedeschi points out that the U.S. unemployment rate is currently much lower than in 2021. This implies that businesses might face difficulties in hiring sufficient workers to meet the increased demand stimulated by another round of checks. Such worker shortages could drive up prices, contributing to inflation.
Conversely, some Democrats, like Elaine Kamarck, senior fellow in governance studies at the Brookings Institution, share a different perspective, albeit for different reasons.
Kamarck, who worked on government waste reduction with Vice President Al Gore during the Clinton administration, dismisses the DOGE dividend as “ridiculous.”
“I can’t imagine they’d be inflationary because I can’t imagine they’d be big enough,’’ Kamarck stated.
She further downplays the potential savings, adding, “There’s no money there, and certainly not enough money to make a big contribution to taxpayers. The guy just says things,” she concluded, referring to Musk.
Conclusion: “Trump Money” – A Long Shot with Economic Caveats
The “Trump money” proposal, while gaining traction within certain political circles, faces significant hurdles and expert skepticism. The ambitious savings targets set by DOGE are considered highly unlikely by budget experts, and the potential for these savings to materialize into substantial checks for taxpayers remains uncertain. Furthermore, economists raise concerns about the potential inflationary impact of distributing another round of government checks, even if framed as a return of savings. While the idea of “Trump money” may appeal to taxpayers, its economic feasibility and practical implementation are far from guaranteed.
