DOGE Stimulus Check Update: Comparing Musk’s Proposal to Previous Payments

President Donald Trump has suggested the possibility of allocating 20 percent of the savings achieved by the Department of Government Efficiency (DOGE) directly to American citizens.

Newsweek has attempted to reach the White House via email for comments outside standard office hours.

Importance of the Situation

Under the president’s guidance, DOGE has been tasked with trimming federal spending and addressing claims of fraud and waste. This unofficial, temporary initiative asserts that it has saved billions of dollars since starting its audits of government agencies, although it has encountered considerable opposition and legal hurdles.

Key Details

At the FII Priority Summit held in Miami Beach on Wednesday, Trump mentioned, “We are even considering a new idea where we allocate 20 percent of the DOGE savings to American citizens, with another 20 percent going towards debt repayment.”

On Tuesday, billionaire Elon Musk, who oversees DOGE, shared his thoughts on X—formerly known as Twitter—indicating he would “consult with the President” about the suggestion to provide tax refund checks to U.S. households using savings from DOGE’s cost-cutting efforts.

Musk’s comments followed a proposal by James Fishback, CEO of the Azoria investment firm, who advocated for compensation to American taxpayers due to the “egregious misuse and abuse of their hard-earned tax dollars that DOGE has uncovered.”

In a four-page proposal, Fishback proposed that sending $5,000 checks directly to American taxpayers would help “restore public trust between taxpayers and their government, fulfilling this social contract and enhancing tax morale.”

Musk has previously indicated that DOGE aims to cut $2 trillion from the federal budget. Fishback’s proposal states that after DOGE completes its operations in July 2026, all taxpaying families would receive a refund check based on 20 percent of the savings realized by DOGE.

Fishback emphasized that the “DOGE Dividend” should be awarded only to working American taxpayers, asserting that “the anticipation of a $5,000 DOGE Dividend in 2026 will motivate many to rejoin the workforce in 2025 to qualify” for this payment.

On Wednesday, Reuters reported that Fishback is conversing with the Trump administration regarding his proposal.

If approved, the distribution of checks to every taxpaying household in the U.S. would mark the first instance since the COVID-era stimulus checks initiated during the latter part of Trump’s first term.

Previous Stimulus Efforts

During his initial term, the government issued two rounds of COVID-related stimulus checks. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in March 2020 provided Economic Impact Payments of up to $1,200 per eligible adult and $500 per qualifying child under 17, with reductions for taxpayers earning over $75,000 annually.

In December 2020, the Consolidated Appropriations Act, 2021, facilitated another $600 payment to eligible individuals.

A 2022 report from the Federal Reserve Board observed that the fiscal stimulus distributed nationwide “contributed to a rise in inflation of about 2.5 percentage points.”

“Our findings suggest that fiscal stimulus increased goods consumption without significantly impacting production, exacerbating excess demand pressures in goods markets,” the report noted. “Thus, fiscal support contributed to price tensions.”

Preston Brashers, a research fellow for tax policy at the conservative Heritage Foundation, remarked on X: “While DOGE’s initiative is praiseworthy, this proposal isn’t prudent. Distributing ‘dividend checks’ is unnecessary. The benefit of cutting spending lies in its effect on inflation control. However, if the government offers stimulus checks, inflation could significantly rise again.”

Fishback defended his proposal, asserting that the DOGE checks would not contribute to inflation, as they would be “completely funded by DOGE’s savings, unlike COVID stimulus checks, which were funded through deficits.”

He added that the dividends would be “distributed solely to taxpayer households, who typically demonstrate a tendency to save (rather than spend) these additional funds.”

According to Fishback, the “DOGE Dividend differs from previous stimulus checks” because it would exclusively benefit taxpaying households.

“Taxpaying households are more likely to save (as opposed to spend) a transfer payment like the DOGE Dividend, since consumption is a smaller share of their income,” he explained, adding: “Paying down debt, saving for emergencies, or investing in education or retirement isn’t inflationary. In fact, reducing debt tends to be deflationary.”

Public Reactions

James Fishback expressed in his proposal: “When a breach of this magnitude occurs in the private sector, the counterparty typically refunds the customer due to their failure to meet their obligations. It’s high time for the federal government to do the same and return funds to taxpayers based on what DOGE has revealed.”

Elon Musk remarked on X: “Ultimately, the President has the final say, so the decision is entirely his.”

Financial literacy instructor Alex Beene from the University of Tennessee at Martin previously told Newsweek: “While a future stimulus check isn’t impossible and could be seen as a goodwill gesture to inform taxpayers of the alleged savings from these cuts during a time of high inflation, the reality is that the likelihood of checks being issued is relatively low.

“Even with possible savings from the recent cuts, stimulus checks impose a substantial financial burden on a government already coping with significant debt and not currently facing the necessity of a pandemic-level emergency. I anticipate legislators will seek alternative measures such as tax reductions and adjustments to some government benefits, directing attention away from stimulus checks as the primary means of supporting Americans.”

Next Steps

Fishback’s proposal is still at an early stage and would require congressional approval before any payments could be made. If sanctioned, the payments are projected to reach American households in 2026.