This week, Elon Musk mentioned that he would “check” with President Donald Trump regarding the possibility of sending American families $5,000 in “DOGE dividend” payments derived from potential savings within the Department of Government Efficiency. This idea is reminiscent of previous economic stimulus initiatives, but will these checks materialize anytime soon? Probably not.
The CEO of Tesla and SpaceX, who has been aggressively reforming federal agencies at Trump’s behest, responded to a post on X on Tuesday night that recommended the US government allow taxpayers to benefit from some of the savings from his recent spending cuts in the form of tax refund checks, akin to earlier stimulus payments. “Will check with the President,” Musk stated.
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The US government has utilized the concept of economic stimulus checks in various forms throughout the years, notably during the Trump and Biden administrations to combat the economic repercussions of the coronavirus pandemic. In 2020, Trump enacted the Cares Act, which allocated $300 billion for one-time stimulus payments, resulting in most adults receiving $1,200. A year later, former President Joe Biden approved the American Rescue Plan Act, offering eligible adults up to $1,400 in stimulus checks.
During a press event on Wednesday, Trump stated that the idea is currently being evaluated and mentioned that part of the anticipated savings could be allocated toward reducing the national debt. “There’s even under consideration a new concept where we give 20% of the DOGE savings to American citizens, and 20% goes to paying down debt, because the numbers are incredible,” Trump explained.
However, these proposals are still in the realm of speculation and rely on Trump and Musk achieving their intended cost-reduction goals, which many economists and Democratic lawmakers contend may not be feasible without sacrificing crucial programs dependent on federal support. Continue reading for all the details we have on this potential stimulus proposal.
What is DOGE and what does it do?
The Department of Government Efficiency, or DOGE, is an initiative led by Musk during the second Trump administration aimed at implementing significant and widespread cuts within the federal government. The official rationale behind this initiative is to curtail federal spending while increasing efficiency. Musk has indicated that the target for this effort is to reduce spending by approximately $2 trillion.
However, the cuts enacted so far have sparked controversy and attracted considerable criticism, particularly due to the mass layoffs at agencies such as USAID and the suspension of regulatory actions at the Consumer Financial Protection Bureau. Detractors argue that the true aim of DOGE is not merely to reduce spending, but rather to consolidate power and induce chaos. Notably, despite its name, it is not an established department within the US government, and many of its actions have been deemed illegal by critics, including what is referred to as Project Democracy.
Why is the proposed stimulus $5,000?
The proposal that Musk acknowledged originated from James Fishback, CEO of the Azoria investment firm and a staunch supporter of both Musk and Trump’s political initiatives. Fishback shared his plan on X, suggesting that the savings resulting from Musk’s government cuts be distributed to the American populace.
Fishback derived the $5,000 per household figure from claiming 20% of DOGE’s $2 trillion savings target, amounting to $400 billion, and distributing it among the “79 million US households that will be net payers of federal income tax,” which he asserted would qualify for these theoretical payments.
Based on that calculation, a $5,000 check could only arise in the ideal scenario of DOGE successfully implementing its cuts, a situation that seems increasingly unlikely given the immense difficulty of actualizing $2 trillion in reductions. Musk later revised that estimate, suggesting that a $1 trillion savings goal would be more plausible, equating to checks valued at $2,500. Presently, DOGE’s website claims to have achieved $55 billion in savings, but the accuracy of this assertion has faced scrutiny.
When would these checks be issued?
The timeline for these payments remains as uncertain as other aspects of this situation. Fishback’s proposal tentatively names “July 2026” for the payments, aligning with July 4, 2026, which is purportedly when the DOGE initiative will conclude. For actual stimulus payments to be made, an official legislative proposal would need to be created and passed, making uncertainty regarding specific details unavoidable at this stage. Furthermore, it is possible that DOGE may continue beyond that date.
In correspondence with CNET, Jassen Bowman, an IRS enrolled agent and tax specialist, echoed many concerns regarding the feasibility of these payments, particularly emphasizing the challenge of garnering Congressional support for the idea. He bluntly described the notion as “a pipe-dream.”
“In reality, we have no idea if it will ever see the light of day,” Bowman remarked. “The two most significant points for consumers to consider are that the work of DOGE isn’t expected to be completed until mid-2026, meaning this isn’t imminent, and that issuing these $5,000 payments to Americans would necessitate Congressional action, which could be difficult given the current deficit climate. Personally, I believe it’s a pipe-dream and will never transpire, as Congress will likely not support such an initiative.”
