How long would it take to to pay for Trump's $2,000 dividends?
WASHINGTON (TNND) — President Donald Trump said his administration will send low- and middle-income Americans $2,000 dividends using revenue generated from his tariffs, but can the government afford it?
President Donald Trump said his administration will send low- and middle-income Americans $2,000 dividends using revenue generated from his tariffs, but can the government afford it? (TNND)
Trump’s tariffs are projected to raise $300 billion per year, according to the nonpartisan Committee for a Responsible Federal Budget, which estimates Trump’s promise to pay Americans dividends would cost about $600 billion. This means it would take two years per $2,000 payment, starting in 2027. If the Supreme Court agrees with lower court rulings that the majority of Trump’s tariffs are unconstitutional, it would take closer to seven years to pay $2,000 dividends using the remaining tariffs not affected by this decision, according to the committee.
On Sunday, Treasury Secretary Scott Bessent cast doubt on the idea that Americans would receive checks, saying the dividend “could come in lots of forms.”
“It could be just the tax decreases that we are seeing on the president’s agenda,” Bessent said.
Direct payments would have to be passed by Congress. The president hasn’t explained whether he intends for the dividends to be recurring like regular dividends or if he views this as a one-time payment.
Based on National Economic Council Director Kevin Hassett’s recent statements to the media, it appears the administration views this as a one-time thing.
“Because of Biden’s inflation, which averaged 5% over four years, people on average lost about $3,400 in purchasing power and they’ve gained about $1,200 this year, but there’s still room to go,” Hassett said.
However, Goldwein and others warn that pumping that much money into the economy would just make inflation worse, which the country experienced at the end of the pandemic.
“It’s interesting to talk about ‘Bidenflation,’ but what really sparked that inflation—of course, it was building up for a lot of reasons—but what really sparked it was that last round of $1,400 per person checks that we sent to every American household after a $600 check,” Goldwein said.
Trump’s original priority with surplus tariff revenue was to pay down some of the $38 trillion national debt, which is rising every year by just shy of $2 trillion, or at least help offset the $4 trillion deficit spending under Trump’s “One Big Beautiful Bill.” Just last month, Trump said in an interview, “Number one is paying down the debt because people have allowed the debt to go crazy.”
Hassett suggested the administration will instead use a “big surge in tax revenues” to reduce the deficit.
“The reality is, we have surpluses in tax collection months, so we have surpluses in April, we have surpluses in September,” Goldwein said. “This is normal. On a steady state, we have seen no surge in revenue.”