WASHINGTON (AP) — A concept that first emerged on social media has made its way to the White House, earning President Donald Trump’s strong approval: to use a portion of the savings from billionaire Elon Musk’s efforts to reduce government spending and return that money to taxpayers.
“I love it,” Trump expressed late Wednesday on Air Force One when asked about the initiative.
If Musk successfully targets $2 trillion in spending cuts by next year, proponents claim that approximately one-fifth of those savings could be distributed to taxpaying households in checks of around $5,000.
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However, before anyone starts dreaming about a financial windfall, budget analysts caution that such massive savings — nearly one-third of the federal government’s annual budget — are unlikely. Additionally, economists warn that distributing checks similar to the stimulus payments issued during the pandemic could exacerbate inflation, a concern that White House officials dismiss.
With the annual budget deficit reaching $1.8 trillion last year and Trump proposing significant tax cuts, there will also be considerable pressure to utilize all savings to decrease that deficit instead of distributing part of it.
Here’s what you need to know about the proposal:
Where is this coming from?
James Fishback, the founder of Azoria Partners, an investment firm established at Trump’s Mar-a-Lago estate in Florida, amplified the idea on X, formerly known as Twitter, prompting Musk to reply that he would “check with the president.” Fishback mentioned that there have also been discussions about this topic with White House officials behind the scenes.
Musk claims that his Department of Government Efficiency has already saved $55 billion — a small portion of the $6.8 trillion federal budget. However, DOGE’s public declarations haven’t validated these alleged savings, and their assertions about millions of deceased individuals fraudulently receiving Social Security have been disproven.
READ MORE: Social Security chief resigns over DOGE’s access to recipient data, AP reports
Fishback advocates for the nonpartisan Congressional Budget Office to assess how much DOGE has saved. He stated that if DOGE manages to cut $500 billion by July 2026, then the checks would amount to $1,250 instead of $5,000.
“We uncovered significant waste, fraud, and abuse,” Fishback told The Associated Press in an interview. “We are committed to recompense and reforming the social contract between taxpayers and the federal government.”
Fishback supports distributing checks rather than allocating all savings to reduce the deficit, as it would incentivize Americans to identify wasteful government spending in their communities and report it to DOGE.
When can I expect my check?
Let’s take a breather. According to the proposal, DOGE must first complete its initiatives, projected to be finished by July 2026. After that, one-fifth of any realized savings could be distributed later that year to roughly 79 million taxpaying households. About 40 percent of Americans do not pay income taxes, so they would not receive a check.
How much can DOGE really save?
Most economists and budget experts are skeptical about whether the focus on “waste, fraud, and abuse” can genuinely lead to significant reductions in government spending. Budget-cutters from both sides of the aisle have attempted to eradicate “waste” — a target with little political backing — for decades, achieving little in terms of deficit reduction.
READ MORE: Fact-checking Trump and Musk’s claims regarding government “fraud and abuse” cuts
A major action taken by the Trump administration thus far has been to dismiss tens of thousands of government employees; however, such actions are unlikely to yield considerable savings.
“Only a small fraction of total spending goes to federal employees,” noted Douglas Elmendorf, former director of the Congressional Budget Office. “The significant expenses are in federal benefits and taxes, which are outside DOGE’s scope.”
John DiIulio Jr., a political scientist at the University of Pennsylvania, wrote in a November essay for the Brookings Institution that “eliminating the entire federal civilian workforce would still leave around 95 percent of all federal spending and the $34 trillion national debt intact.” He remarked that current government contractors and nonprofits funded by the government employ three times as many people as the federal government’s 2.2 million employees.
Additionally, it remains uncertain how much can be saved without Congress formalizing it into law.
“Firing someone doesn’t result in savings until Congress returns and reduces the budget for that employee’s agency,” Elmendorf explained. “If you terminate someone but keep the budget intact, then this funding could be reallocated elsewhere. Therefore, DOGE cannot realize savings without legislative changes as well.”
Wouldn’t another round of government checks lead to higher inflation?
Trump and his economists attribute the significant inflation spike in four decades to Biden’s $1,400 stimulus payments distributed in the spring of 2021. However, they contend that checks derived from reduced government spending would not contribute to inflation.
Kevin Hassett, director of the White House’s National Economic Council, stated on Thursday that, since the money would have been spent by the government anyway, having it distributed to consumers would create a balance. Biden and Trump’s stimulus payments were financed by deficit spending, which can be more inflationary.
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Nevertheless, Ernie Tedeschi, director of economics at the Yale Budget Lab and a former economist in the Biden administration, remarked that additional government payments are “the last thing we need economically at this moment.”
With the U.S. unemployment rate significantly lower than it was in 2021, Tedeschi indicated that businesses might struggle to recruit enough labor to meet the increased demand resulting from new payments. Such worker shortages could drive up prices.
Conversely, some Democrats concur with Hassett for differing reasons.
“I doubt they’d be inflationary because I can’t envision them being substantial enough,” said Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution.
Kamarck, who collaborated with Vice President Al Gore to eliminate government waste during the Clinton administration, dismissed the idea of DOGE-derived checks as “absurd.”
“There’s no money there, and certainly not enough to make a significant impact on taxpayers,” she remarked. “He just makes statements,” she added, referring to Musk.
