A DOGE rebate has been proposed, but will the $5000 checks ever be cut?

 

Donald Trump speaking on Air Force One. Yahoo Finance/AFP.

A DOGE rebate has been proposed that would give taxpayers a $5000 check, but will the DOGE dividend ever happen? Yahoo Finance. Both President Trump and Elon Musk have expressed support of the idea that would use 20% of the original goal of a $2 trillion reduction to send to taxpayers. But it is unclear how DOGE would get that much funding cut when the goal has now been cut to a $1 trillion reduction. And DOGE would have a long way to go to reach that level of cuts as it has only cut $55 billion in funding. The payment would also require action from congress as well, and it may be tough to pass due to deficit hawks in the Republican Party. Trump also said that tariffs, which have mostly not been put into place, could help pay for the checks. 

My Comment:

This isn't a bad idea but I also just don't see it happening. Though the article is pessimistic about the chances of cutting enough government waste to actually pay for the $5000 checks, it's not actually the biggest hurdle and that's congress. 

I do think that giving people back some of their money that has been wasted on things like transgender plays in Columbia and other such nonsense is justified. The tax payers in this country are getting fleeced and it would be good for them to get at least some of their money back. 

There are worries that this could cause inflation, and to a degree there is some justification for that. When folks spend more money it does cause inflation, but I don't think we would see the post-pandemic stagflation we saw after the pandemic after Biden took office. The inflation wasn't just caused by folks spending money due to stimulus checks, but also because we borrowed and printed money to pay for it. This would be money that we already have printed so inflation, while still a concern, would not be as severe. Tariffs would help to reduce the amount of inflation as they would strengthen the dollar and export our inflation to other countries. That might be the answer to worries about inflation. 

Regardless, like I said, the real problem is congress and I can't see this passing. The Democrats in congress are extremely unlikely to vote for this as it would be popular for voters and given how rough their electoral chances are after 2024, I doubt they would want to give Trump a free win. 

But the real problem is the Republicans. They don't actually need any Democrats to vote for this package as they control the House and Senate. But the deficit hawk of the party wants to pay down the national debt and balance the budget instead and they would want to use this money for that. To be fair, the proposal already earmarks 20% of the savings to paying down debt, but for deficit hawks, that's not nearly enough. 

I do think they have a point. The national debt is out of control, to the point where 13% of the entire budget is going to paying down interest. Getting rid of this debt would be a very good thing and though the best time to have dealt with the problem was 20 years ago, the 2nd best time is now. Still, even if all $1 trillion in possible savings would be spent on reducing the debt, it would still be a drop in the bucket given how massive our debt problem actually is. Total national debt is around $35 trillion so while getting it down to $34 trillion would be an improvement it doesn't actually solve the problem. 

Still, it's possible that a deal for smaller checks could be made.  If the size of the checks was reduced considerably, perhaps $1000 to $500 and the rest going to paying down debt, the deficit hawks could be brought on board? That would at least get folks some money while the lions share of the money goes to their priority of reducing the debt. Keep in mind the original figure was for a $2 trillion savings and that doesn't appear to be in the cards. $5000 was probably never really in the cards. 

Of course it's way too soon to make any real predictions, we don't know how much money DOGE is going to be able to cut. There is still a long way to go before we cut enough where the checks would even be worth cutting. The higher estimate of DOGE savings is $55 billion, and if we cut a check with that folks would be getting around $150, assuming the 20% ratio (but please, don't trust my math!). Until that number is a lot higher, this is just an academic discussion.