President Donald Trump’s proposal to give every American adult a $5,000 “dividend” if Republicans retain control of both the House and Senate could add roughly $1.2 trillion to the federal government’s costs in a single year, according to the nonpartisan Committee for a Responsible Federal Budget (CRFB).
The budget watchdog warned that the proposal could significantly increase the federal deficit while adding pressure to inflation and borrowing costs. CRFB estimates the payments would cost more than 3.5% of gross domestic product.
“This proposal is fiscally dangerous, economically backwards, and fundamentally unserious,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement Thursday.
CRFB said new tariff revenue would not cover the proposed payments. The organization estimates tariff revenue is generating less than $200 billion annually and is already incorporated into existing deficit projections.
MacGuineas said the president’s “half-baked political scheme” could increase borrowing costs throughout the economy, fuel inflation and further widen the federal deficit.
“It’s hard to understand how anyone could look at our current fiscal and economic situation and think we need to borrow another $1.2 trillion to send everyone cash,” she said.
According to CRFB, adding the proposed dividend would push the federal deficit to approximately 9% to 10% of GDP next year. Its more detailed estimate puts the 2027 deficit at about 9.4% of GDP, compared with a projected 5.8% this year.
Trump unveiled the proposal Wednesday at the Republican Midterm Convention in Dallas, making the payment contingent on Republicans retaining unified control of Congress following the November midterm elections.
“Because of our tremendous strength and success economically, I will issue a dividend to every adult citizen in the United States of America for $5,000,” the president told the crowd.
Trump compared the proposal to a company distributing cash to its shareholders. He also said the money would have to be spent in the United States.
The president has previously floated tariff-funded dividend checks and a proposed Department of Government Efficiency dividend, but neither initiative has materialized.
Trump provided few details about how the latest proposal would be financed. Vice President JD Vance later suggested tariff revenue could play a role.
“We’re taking in an extraordinary amount of revenue because the president of the United States is actually standing up to both foreign companies, but also foreign countries who have been taking advantage of American workers,” Vance told Fox News.
The proposal comes as the nation’s gross national debt has surpassed $40 trillion. CRFB said a $5,000 one-time payment would more than double the projected primary deficit for 2027, from about $780 billion to about $2 trillion. Total projected deficits would rise to roughly $3.1 trillion.
MacGuineas warned that “the more goodies politicians promise, the more ordinary Americans will pay the price at the grocery store, on their mortgage statements, or in the burden they leave their children.”
