(NewsNation) — Former President Donald Trump proposes that some of the savings stemming from Elon Musk’s initiative for government efficiency be returned directly to taxpayers. However, this does not indicate that checks will arrive in mailboxes anytime soon.
Trump has recently shown support for the concept—originating on social media—of distributing 20% of the savings generated by the Department of Government Efficiency back to the taxpayers as a “DOGE dividend.”
“I am enthusiastic about this idea. A 20% dividend is a great way to utilize the savings we’ve gained by tackling waste, fraud, abuse, and other issues,” Trump expressed to reporters last week.
Upon questioning about the potential amount, Trump remarked, “It could be substantial. With 20%, we’d return a significant sum to the taxpayer.”
Musk also advocates for this idea, comparing the proposed “DOGE dividend checks” to “the spoils of battle” during a recent interview.
However, the issuance of dividend checks is not guaranteed. Congressional approval is necessary for this plan, and even some Republican members of Congress have shown reluctance to accept it.
It’s also uncertain how much savings can be generated for taxpayer returns. Clear evidence of significant savings has been limited, and financial experts express skepticism regarding DOGE’s capacity to achieve its ambitious $2 trillion savings target independently.
“I wouldn’t advise Americans to expect a large DOGE dividend in the near future,” cautioned Romina Boccia, director of budget and entitlement policy at the libertarian Cato Institute.
Boccia added: “While politicians enjoy offering benefits to supporters, they often find it challenging to genuinely cut spending and reduce deficits.”
Here’s what you need to know about the DOGE dividend and its feasibility.
What is the ‘DOGE dividend’ check?
The notion of a “DOGE dividend” gained traction on social media last week when “anti-woke” investor James Fishback shared a proposal and mentioned Elon Musk.
Fishback proposed issuing “tax refund checks” as a form of “restitution” to approximately “79 million tax-paying households.”
These households would potentially receive a $5,000 check, representing a 20% share of DOGE’s projected $2 trillion in targeted savings, according to Fishback’s proposal.
The idea captured Musk’s attention, who assured he would present it to Trump, who has since voiced his support.
However, Congress would need to sanction the checks, and achieving the payout outlined by Fishback would necessitate Musk meeting that $2 trillion savings projection—a target that is regarded with skepticism.
“I believe that aiming for $2 trillion is probably too ambitious for DOGE to accomplish by itself,” Boccia stated.
To reach that level of savings, Congress would need to be on board, resulting in cuts to major entitlement programs like Social Security and Medicare, which Trump has already ruled out.
DOGE claims to have already saved an estimated $65 billion through a mix of fraud detection, contract cancellations, workforce reductions, and various cost-cutting measures.
Nonetheless, multiple analyses have raised questions about the credibility of DOGE’s figures, revealing errors that significantly inflate the reported savings. A New York Times investigation pointed out that the leading item on the DOGE website was inaccurate by around $8 billion.
“Currently, we cannot fully accept DOGE’s claims without scrutiny,” Boccia indicated.
Fishback told NewsNation’s Chris Cuomo that his proposal would assist DOGE in reaching its $2 trillion goal, as it would motivate the public to report wasteful spending.
“Every American can contribute by reporting fraud and waste directly to DOGE via X, and that will help increase savings, reach $2 trillion, and see the checks distributed next summer,” Fishback asserted.
Who would receive DOGE dividend checks?
According to Fishback’s proposal, the checks would only be allocated to households that pay income taxes, leaving out millions of lower-income Americans.
An estimated 72.5 million households—approximately 40%—did not pay federal income tax in 2022, as per an analysis by the Tax Policy Center.
The majority of those who don’t pay income taxes do so because their income is low. About 60% of non-payers earn less than $30,000, while another 28% earn between $30,000 and $60,000, according to the Tax Policy Center.
“While it’s suggested by some politicians that people are somehow gaming the system by not paying taxes, the reality is that many do not pay federal income tax simply because they earn very little,” Howard Gleckman, a senior fellow at the Tax Policy Center, noted in his report.
Among those who did not pay federal income tax in 2022, about a third were aged 65 or older, meaning many who primarily depend on Social Security benefits would not be eligible for DOGE dividend checks according to the current proposal.
Are DOGE dividend checks a good idea?
Some experts believe that issuing DOGE dividend checks could exacerbate inflation, similar to how stimulus checks distributed during COVID contributed to rising prices.
“I appreciate what DOGE is aiming to achieve, but this idea is misguided. There’s no requirement for ‘dividend checks,’” Preston Brashers, a tax policy research fellow at the conservative Heritage Foundation, commented on X.
“If the government were to distribute stimulus checks, inflation would likely surge again,” Brashers cautioned.
Conversely, Fishback contends that DOGE dividend checks would not be inflationary because “unlike COVID-stimulus checks that led to a deficit,” the new checks would be “funded exclusively by DOGE-driven savings.”
Kevin Hassett, director of the White House’s National Economic Council, echoed this assertion in a press conference last week, asserting that the dividend checks would not trigger inflation.
“Consider the scenario where we don’t expend government money and instead refund it to the populace. If they spend all of it, balance is achieved,” Hassett explained.
Boccia believes that a DOGE dividend could inflame inflation if the government borrows money to finance checks based on anticipated savings rather than actual savings realized.
Other experts express skepticism about the magnitude of these checks and whether they would be significant enough to influence the economy.
“I doubt they’d be large enough to drive inflation,” observed Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution, during an interview with The Associated Press.
Kamarck dismissed the DOGE dividend as “absurd” and asserted that there isn’t sufficient money to cut that would generate a considerable return for taxpayers.
What do lawmakers think about the idea?
The concept of a DOGE dividend check would require Congressional approval, and even lawmakers aligned with Trump appear doubtful.
House Speaker Mike Johnson showed a lack of enthusiasm when questioned about the idea at the Conservative Political Action Conference last week.
“Politically, this would be beneficial for us; after all, you could send checks to everyone,” Johnson remarked. “However, reflecting on our fundamental principles, fiscal responsibility is a core tenet of conservatism. That defines our brand.”
Johnson further stated, “We are contending with a $36 trillion federal debt. We have a significant deficit to address. We need to focus on paying down our credit card.”
Senator Ron Johnson, R-Wis., expressed his appreciation for Musk’s efforts to highlight instances of waste, fraud, and abuse but cautioned against the DOGE dividend proposal.
“I support allowing Americans to retain more of their hard-earned income, but DOGE savings should first go towards reducing expenditures to prevent inflation from diminishing their purchasing power,” Johnson expressed on X.
Senator Ted Cruz, R-Texas, mentioned he would “want to examine the specifics” of the proposal, according to Business Insider.
Republican Senator Cynthia Lummis from Wyoming conveyed to Scripps News that tackling debt and controlling inflation would be her primary focus before any potential savings associated with DOGE are addressed.
“If we have funds remaining after addressing inflation, debt, and the deficit, it’s always a commendable notion to return money to taxpayers. But given our $36 trillion debt, we’ve put ourselves in a considerable predicament,” Lummis concluded.
