Trump wants to send Americans money. Congress and economists don’t seem thrilled with the idea

WASHINGTON (AP) — Donald Trump’s pitch to send Americans $5,000 checks should Republicans prevail in the November midterms is drawing scorn from some members of Congress — the very people who have constitutional authority over federal spending.

Economists and other political observers are voicing concerns about the potential effects on inflation and the national balance sheet. Taken together, it’s a swift reaction that makes clear that Trump’s dubious election-year gambit is likely little more than another grand promise from a politician with a long history of them.

“Donald Trump is a known liar. This is the biggest liar to ever serve in government. Period,” said Rep. Robert Garcia, a California Democrat who was in Dallas on Thursday as part of his party’s effort to counter Republicans’ midterm convention. “The dividend is not happening.”

Trump previously pledged to use savings from the Department of Government Efficiency and revenue from tariffs on foreign imports to distribute payments of $2,000 or more, but none of that came to pass.

His latest idea comes as the U.S. economy is reckoning with persistent inflation and rising interest rates, two forces that have politically undermined Republicans after previously helping them reclaim power from Democrats. Trump claimed the payments would be possible because of the economy’s strength, yet consumer sentiment is weak as gasoline prices are increasing because of the war with Iran and wages are struggling to keep pace with inflation.

A few of Trump’s allies embraced the idea, including Ohio Sen. Bernie Moreno, who said he would prepare legislation for the payments. But critics accused him of trying to buy votes at a time when Republicans are trying to maintain slim majorities in Congress.

“I don’t know about you all, but frankly I’m insulted by the notion that my vote this November could be bought for 5k,” Rep. Thomas Massie, a Kentucky Republican who is one of Trump’s least favorite lawmakers, wrote on social media. “Not to mention the inflation this would cause.”

Rep. Ted Lieu, vice chairman of the House Democratic caucus, outright mocked the president.

“If Democrats flip the House and Senate everyone will get a $10,000 dividend, and a pony, and free ice cream for life,” he posted on social media. “(Folks can also choose free yogurt for life, because we’re Democrats after all).”

The president’s proposal, unveiled in his nearly two-hour speech Wednesday night in Dallas, would carry a price tag exceeding $1.3 trillion if Congress were to authorize $5,000 payments to the nation’s 270 million adults.

The Treasury already is running a current annual deficit approaching $1.8 trillion, and the total national debt topped $40 trillion this year. According to Treasury Department data, that interest expense for fiscal year 2026 will come to about $1.27 trillion, similar to the projected cost of Trump’s idea.

The price tag prompts concerns about debt and inflation

Economists raised concerns about inflationary effects from such a large infusion of cash into the economy.

Michael Strain, director of economic policy studies at the American Enterprise Institute, a center-right think tank, said Trump would be repeating the same policy mistake as his predecessor, Democrat Joe Biden.

As part of his 2021 pandemic relief package, Biden provided $1,400 payments to most Americans, which Strain had warned at the time would spark inflation.

“But Mr. Trump’s proposal would be worse than the Biden stimulus in the sense that in 2026 the economy already has an inflation problem,” Strain said, while Biden’s policy was intended to shore up an economy disrupted by COVID-19.

“Trump would be pouring gasoline on lit inflationary embers and hoping it wouldn’t ignite,” Strain said.

At the center-left Committee for a Responsible Federal Budget, senior policy director Marc Goldwein agreed with the comparison to Biden’s policy and emphasized the potential impact on the deficit.

“The idea that we’ve had fiscal success is backwards and bordering on laughable,” he said. “We don’t have surpluses to give away.”

The financial markets appeared to be unimpressed by Trump’s promise. Interest rates on the 10-year U.S. Treasury note climbed above 4.9% in Thursday afternoon trading, meaning that the cost of mortgages and auto loans will likely rise in ways that hurt the middle class.

Trump allies are faced with their own arguments

Many Republicans, including from Trump’s inner circle, are in a difficult spot after they’ve spent years blasting Biden and other Democrats for their spending.

As recently as last week, Vice President JD Vance and Treasury Secretary Scott Bessent blamed Trump’s predecessor when asked about current price levels and consumer concern.

In the White House briefing room, Vance said at once that he was not interested in assigning blame while in the same answer noting “how endemic inflation became during the Biden administration.”

Bessent told CNBC that Biden and his allies “torched the American people” with their approach. “Almost 50 percent of the great inflation came from the out-of-control spending that went on then,” he argued.

Arkansas Gov. Sarah Huckabee Sanders, one of Trump’s press secretaries during his first presidency, ran into the same conundrum Thursday — after the president’s speech — when she shared on social media her appearance on Fox Business Channel.

“You do not build a strong economy by giving things away,” Sanders said.

“At the end of the day, though, somebody has to pick up the check,” she continued, “and it’s the taxpayers that will ultimately pay the price.”

Goldwein said ultimately that political and constitutional realities could spare the president.

“You never want to say it’s impossible,” he said. “But within the confines of the law, at least the law as everybody understands it, the president does not have legal authority to send people $5,000 per adult, and he needs Congress to pass a law.”

——-

Barrow reported from Atlanta.