Former President Donald Trump has indicated he is contemplating the distribution of “DOGE dividends” to American citizens, utilizing any savings generated by his Department of Government Efficiency through substantial reductions in federal expenditure and workforce.
However, Congress remains unconvinced, and it is uncertain whether DOGE’s approach will deliver the anticipated savings.
Billionaire Elon Musk proposed the idea of DOGE dividends to Trump last week, inspired by a suggestion from a user on his platform, X. By Wednesday, Trump mentioned he was contemplating allocating 20 percent of DOGE’s savings to the American public and another 20 percent towards reducing the national debt.
It appears Trump views this initiative as a potential boost to his approval ratings, which have declined since his presidency began; during his first term, he was known for signing the widely popular pandemic stimulus checks.
Nevertheless, even Republican legislators are currently reluctant to back the proposal, which would require congressional approval amid ongoing budget discussions.
Some lawmakers have expressed a willingness to consider it. Business Insider reported on Friday that Sen. Ted Cruz (R-TX) seeks more details before committing, while Sen. Josh Hawley (R-MO) indicated a preference for redistributing DOGE savings via the child tax credit instead.
Conversely, other Republicans have openly criticized the concept, suggesting that addressing the national debt should take precedence over sending checks to citizens. This group includes House Speaker Mike Johnson, North Carolina Sen. Thom Tillis, and Rep. Eric Burlison from Missouri.
“When we think about our core principles, fiscal responsibility is essential for conservatives. That defines us,” Johnson asserted on Thursday at the Conservative Political Action Conference (CPAC). “With a $36 trillion federal debt and a significant deficit, we need to reduce our debt.”
Trump can ill afford dissent among Republicans due to their slim majorities in both the House and Senate. This casts doubt on the likelihood of DOGE dividends being approved, even if they were shown to be financially viable.
Are DOGE’s cost-cutting goals even achievable?
The initial proposal for dividends anticipates that DOGE will ultimately realize $2 trillion in savings, with 20 percent allocated to American taxpayers, amounting to a $5,000 tax return for each household. However, locating $2 trillion in cuts proves to be a daunting, if not impossible, task.
As of Monday, DOGE reported achieving $55 billion in savings, claiming to have a so-called wall of receipts. However, major news outlets including CBS, the New York Times, and Politico have identified significant accounting discrepancies in DOGE’s reports, revealing that it may have overstated its savings by billions.
To fulfill its promises of cost reductions, DOGE would likely need to make severe cuts to Social Security, Medicare, and the defense budget, while also finding ways to lower interest payments on the national debt. Spending in these areas constituted over $4.8 trillion of the $6.9 trillion federal budget for fiscal year 2024.
Trump previously pledged not to alter Social Security, Medicare, and Medicaid; nonetheless, he has recently backed a Republican budget proposal featuring steep cuts to Medicaid. It remains to be seen whether he would contemplate further reductions in other significant entitlement programs to achieve the savings target set forth by Musk and his team.
