Trump and Musk Advocate for $5,000 ‘DOGE Dividend’ Payments

As the newly formed Department of Government Efficiency looks to reduce federal spending, both Elon Musk and President Donald Trump have proposed the idea of returning a portion of those savings to Americans in the form of $5,000 dividend checks.

However, experts warn that it is too early to predict the feasibility of such checks and emphasize potential economic repercussions for consumers if they were to be issued.

Musk and Trump endorsed a proposal initiated by James Fishback, CEO of investment firm Azoria, which appeared on social media platform X on February 18, suggesting that millions of American households could receive checks.

“Americans sent their hard-earned tax dollars to Washington, D.C.,” Fishback stated to CNBC.com, adding that a portion of those funds were likely wasted.

“There needs to be restitution to correct that,” Fishback asserted.

The White House published a report in early February highlighting alleged “waste and abuse” of funds at the U.S. Agency for International Development, including $1.5 million designated for promoting diversity, equity, and inclusion in workplaces in Serbia and $70,000 for a DEI-themed musical in Ireland.

During Trump’s administration, the DOGE initiative aimed to cut $2 trillion from federal spending. Nonetheless, Musk indicated in a recent interview that this goal might be the “best-case scenario,” with a potential “good shot” at achieving half that amount.

In his proposal, Fishback assumes that DOGE will realize $2 trillion in spending reductions. By allocating 20% of these savings—approximately $400 billion—it could allow for each of the around 79 million tax-paying households to receive a $5,000 tax refund, as outlined in Fishback’s plan.

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The notion of direct payments is not new to American households, many of whom benefited from stimulus checks during the Covid pandemic. However, Fishback clarified that these potential payments would be distinct from those economic stimulants that serve to encourage spending during periods of low gross domestic product growth. Unlike the stimulus checks, the proposed DOGE dividend checks would only be available to households that pay federal income taxes.

The scheme resembles the Alaska Permanent Fund in that it aims to distribute a portion of collected savings, according to Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

According to the plan, only “net payers of federal income tax”—individuals who contribute more in taxes than they receive—would qualify for the rebate. This means that many low-income Americans would be excluded from receiving funds, as the Pew Research Center indicates that most taxpayers earning under $40,000 effectively pay no federal income tax.

Fishback noted that while there isn’t a minimum income threshold, Americans must file a federal tax return to qualify for the payment. He added that the potential for these payments could incentivize non-working individuals to return to the workforce.

It is important to highlight that the plan’s structure could change if it were to be considered by lawmakers.

Trump has voiced his support for the concept, with Musk, whom Trump enlisted to help implement DOGE, expressing agreement that there are strong incentives for average Americans to report instances of waste, fraud, and abuse, as per a recent discussion with Fishback.

To distribute the DOGE checks, the Trump administration will require Congressional approval. Fishback has been actively engaging with members of the House and Senate to advocate for the idea.

Last week, House Speaker Mike Johnson, R-Louisiana, described the plan as “great” politically but suggested that other priorities should be addressed first. Experts argue that DOGE needs to ascertain the extent of savings before making promises of checks to the public.

“We have a $36 trillion federal debt. We have a massive deficit,” Johnson remarked. “I believe we need to pay down the credit card.”

White House Deputy Chief of Staff Stephen Miller recently stated that the DOGE checks would be processed through the ongoing reconciliation efforts in Congress.

However, some experts have expressed skepticism regarding the proposal.

“There is no appropriation for this,” remarked Elaine Kamarck, a senior fellow at the Brookings Institution and former administrator of the Clinton Administration’s National Performance Review, which aimed to modernize the federal government.

“You cannot allocate funds without Congressional authorization,” Kamarck emphasized. “That would be illegal.”

Furthermore, it remains uncertain if the DOGE initiative can generate sufficient savings to justify $5,000 payments, given that initiatives aimed at reducing immigration may necessitate increased spending elsewhere.

Until meaningful savings are achieved, discussions of dividend checks may be premature, according to MacGuineas.

“When you are facing $2 trillion deficits annually, you cannot distribute more funds in stimulus checks,” MacGuineas stated.

“In effect, you would be borrowing more to return to taxpayers, but that debt burden still falls on them,” she explained.

However, if the DOGE initiative could produce $1 trillion in annual savings, “then it would certainly be logical and beneficial to return additional savings to taxpayers,” she stated.

Inflation surged after the Covid pandemic and continues to exceed the Federal Reserve’s target of 2%. Several experts worry that further direct payments to Americans could exacerbate inflationary pressures.

“This is undoubtedly the wrong time for any form of consumer stimulus,” asserted Judge Glock, director of research and senior fellow at the Manhattan Institute. “With inflation remaining elevated, any type of stimulus would only worsen that inflation.”

Nevertheless, Kamarck pointed out that the savings generated by DOGE might not result in payments substantial enough to drive inflation.

The discussion surrounding direct payments coincides with Congress potentially deliberating on extending provisions from the Tax Cuts and Jobs Act later this year.

According to senior policy analyst at the Tax Foundation, Alex Muresianu, numerous policies are already being incorporated into that package, raising deficit concerns. “This would be another significant item to include,” he noted.

In the meantime, Fishback insists that the DOGE dividend checks would merely reimburse Americans for taxes they already paid.

Moreover, he mentioned that should Americans receive an unanticipated $5,000, they are likely to utilize it for paying down debt, saving, or investing toward long-term objectives such as retirement, which would not contribute to inflation, citing a 2019 CNBC survey.

“Every American has the mechanism with DOGE and the incentive through the DOGE dividend to report instances of waste, fraud, and abuse,” Fishback stated. “By equipping every American with a stake in this initiative, we’ll better protect our hard-earned tax dollars.”