In recent discussions, a proposal originating from social media has caught the attention of the White House, garnering enthusiastic support from President Donald Trump. The idea is to take some of the budgetary savings attributed to billionaire Elon Musk’s efforts aimed at government spending cuts and distribute them back to taxpayers.
During a flight on Air Force One, Trump expressed his excitement about the plan, stating, “I love it.” Advocates of the initiative suggest that should Musk’s ambitious goal of reducing expenditures by $2 trillion be realized by the end of the upcoming year, roughly 20% of those savings could translate into checks for taxpayers, potentially amounting to about $5,000 per household.
However, it is essential to approach these estimates with caution. Budget analysts indicate that such substantial savings, which would represent nearly a third of the federal government’s yearly budget, are improbable. Furthermore, economists warn that disseminating another round of checks, akin to the stimulus payments issued by Trump and President Joe Biden during the pandemic, might exacerbate inflation, although White House officials counter this worry.
The backdrop to this proposal includes a significant annual budget deficit, which stood at $1.8 trillion last year, alongside Trump’s push for extensive tax reductions. This financial scenario could lead policymakers to prioritize reducing the deficit over distributing funds to taxpayers.
Curious about its origins? The concept was brought to light by James Fishback, who founded the investment firm Azoria Partners at Trump’s Mar-a-Lago resort in Florida. Fishback shared the proposal on X, previously known as Twitter, which prompted Musk to respond affirmatively, noting he would “check with the president.” Additionally, Fishback claims there have been private discussions regarding the proposal with officials in the White House.
Musk has suggested that his Department of Government Efficiency has already eliminated $55 billion in government expenditure—albeit this figure represents a mere sliver of the overall $6.8 trillion federal budget. However, the accuracy of these proclaimed savings remains unverified, particularly claims suggesting that millions of deceased individuals were unlawfully collecting Social Security benefits.
Fishback has indicated a preference for the nonpartisan Congressional Budget Office to assess the actual savings attributed to DOGE. Notably, he mentioned that if the Department of Government Efficiency manages to cut $500 billion by July 2026, taxpayer checks would only total $1,250 rather than the initially estimated $5,000.
Fishback asserts that identifying waste and inefficiencies within government systems can lead to significant societal benefits, arguing that returning funds to taxpayers would motivate them to report wasteful spending within local government ventures. However, questions arise regarding the timeline for such checks to be distributed. Under the proposal, any savings must be verified by DOGE, with distribution potentially occurring in late 2026 for about 79 million income-tax-paying households. Notably, around 40% of Americans do not pay income tax and would therefore not receive any funds.
On the question of potential savings, many in the economic arena remain skeptical of DOGE’s capacity to effectively cut government spending by addressing “waste, fraud, and abuse.” Historically, budget reducers across party lines have struggled to eliminate considerable “waste” from the budget, which lacks significant political backing.
While the Trump administration’s decision to downsize the federal workforce represented a substantial shift, experts suggest such actions won’t yield notable savings. Douglas Elmendorf, former director of the Congressional Budget Office, stated, “Only a small portion of federal spending is allocated to employees,” arguing that most expenditures go toward federal benefits and taxes, areas not directly managed by DOGE.
Moreover, the actualization of any savings by DOGE would hinge on congressional approval, emphasizing that merely terminating positions does not necessarily lead to financial savings unless appropriations are simultaneously reduced.
With regard to inflation concerns, Trump and his economists have attributed rising prices to the $1,400 stimulus checks distributed in 2021. Nevertheless, they assert that taxpayer checks resulting from government savings would not spur inflation. Kevin Hassett, who leads the National Economic Council, claims that as the funds would have been spent by the government regardless, consumer usage should maintain economic balance.
Conversely, economist Ernie Tedeschi argues that issuing more government checks could introduce challenges, given the current low unemployment rate. He highlights that increased consumer demand might strain businesses, potentially leading to price hikes due to worker shortages.
Interestingly, some Democrats share favorable views on the notion of distributing checks from government savings, albeit for distinct reasons. Elaine Kamarck, a senior fellow at the Brookings Institution, cast doubt on the concept, arguing that there would not be significant funds available for distribution. She labeled the idea as “ridiculous,” directly questioning the viability of Musk’s claims. “There’s no money there, and certainly not enough to make a big contribution to taxpayers,” she stated.
