Treasury Secretary Scott Bessent says officials have been developing ways to finance President Donald Trump’s proposed $5,000 payment to every adult U.S. citizen without increasing the federal deficit, although the administration has not disclosed the funding mechanism or settled whether Congress must approve it.
By yourNEWS Media Newsroom.
Treasury Secretary Scott Bessent told lawmakers Tuesday that the Trump administration has been working for months on ways to deliver President Donald Trump’s proposed $5,000 “dividend” to American adults without adding to the federal deficit, while acknowledging that major questions about funding and congressional authority remain unresolved.
Testifying before the House Financial Services Committee, Bessent said Treasury officials are actively examining how the proposal could be structured and whether the administration could carry it out without new legislation.
“There are ways to do it that would not affect the deficit,” Bessent said.
He declined to explain what revenue, spending reductions or other mechanism could offset the cost of sending thousands of dollars to every eligible adult.
“That is in process right now,” Bessent said. “I’m not ready to discuss it at present, but at Treasury, we’ve been working on it for quite a while.”
The comments provide the clearest indication yet that Treasury is treating Trump’s proposal as more than a campaign talking point, even though no detailed financing plan has been released.
Trump announced the proposal at the Republican midterm convention in Dallas last week, promising a $5,000 cash payment to every adult U.S. citizen if Republicans retain control of both the House and Senate in the Nov. 3 elections.
“If the Republicans win, you win with us, and you get $5,000. It will be called the ‘Trump dividend,’” Trump said.
The White House subsequently promoted the proposal as a $5,000 payment to “every adult American citizen,” comparing it to a corporation returning money to shareholders.
Trump reiterated his commitment Monday.
“The $5,000 is going to happen 100 percent,” Trump said. “And the reason is because our country is taking in trillions and trillions of dollars. And it’s going to happen.”
The administration has not yet specified an income limit, payment timetable, eligibility rules beyond adulthood and citizenship, or whether the money would be treated as taxable income.
Bessent also left unanswered the central fiscal question: how a program potentially costing more than $1 trillion could be paid for without additional federal borrowing.
The Committee for a Responsible Federal Budget estimates that paying $5,000 to every adult citizen would cost approximately $1.2 trillion in a single year, or more than 3.5% of gross domestic product. The group said the price could fall if payments were restricted for higher-income households.
That estimate makes the financing question particularly significant because the federal government is already operating with a large annual deficit.
The Congressional Budget Office estimated the government ran a $2 trillion deficit during the first 11 months of fiscal year 2026.
Bessent nevertheless told lawmakers he believes Treasury can find a way to make the payments without making that shortfall larger.
“I think putting more money in the American people’s pocket should be an objective for everyone, and I believe there are ways to do it that would not affect the deficit,” he said.
One possible argument advanced around the proposal has involved federal revenue generated by tariffs and other economic policies. Trump has repeatedly said the United States is collecting extraordinary amounts of money that could support payments to Americans.
Fiscal analysts have challenged the idea that existing tariff revenue by itself could finance the checks.
The Committee for a Responsible Federal Budget said current tariff revenue is generating less than $200 billion annually and is already incorporated into federal deficit projections, meaning using that money for a new $1.2 trillion payment program without an accompanying offset would still increase borrowing relative to current projections.
CBO’s latest budget data also show that tariff revenue has come in below earlier projections following changes to the administration’s tariff policies and court rulings.
Bessent did not say Tuesday that tariff receipts alone would finance the dividend.
Another unresolved issue is whether the executive branch has legal authority to issue the money without Congress.
Bessent told lawmakers that Treasury is researching that question.
If officials ultimately conclude that legislation is necessary, he said he is prepared to work with House Speaker Mike Johnson after the midterm elections.
“If it becomes clear that we need congressional authority, I will meet with [House Speaker Mike Johnson], and I look forward to it,” Bessent said.
Johnson has already said publicly that he believes congressional action would be required.
The speaker said Sunday that Trump’s plan would need approval from lawmakers, creating a distinction between the president’s suggestion that his administration could potentially issue the payments and Congress’ traditional constitutional authority over federal spending.
The Constitution gives Congress control over appropriations from the Treasury, although the administration has not disclosed what legal mechanism it is examining or whether it believes some existing authority could be used to deliver the dividend without a new appropriation.
Bessent’s testimony therefore leaves open two different paths: Treasury could identify existing authority that administration lawyers believe permits the payments, or the White House could ask Congress to enact legislation authorizing and funding them.
Neither path has been finalized.
The proposal has also become intertwined with the midterm campaign because Trump explicitly conditioned the dividend on Republicans maintaining both congressional majorities.
The White House has continued to promote the promise since the Dallas announcement, while some lawmakers have questioned its cost, legality and potential effect on inflation.
No legislation authorizing the checks has been enacted, and Americans are not currently eligible to apply for or receive the proposed payment.
The economic consequences would also depend heavily on how the program is financed.
A fully offset program funded through spending reductions or new revenue would affect the deficit differently from a debt-financed payment. If the government borrowed the entire estimated $1.2 trillion, it would substantially increase federal borrowing. If Treasury and Congress identified equivalent offsets, the direct deficit impact could theoretically be neutral.
Bessent’s assertion Tuesday is that the administration believes the latter can be accomplished, but he has not yet explained how.
That distinction is important as federal finances remain under pressure.
CBO’s August review estimated that the government had already recorded a $2 trillion shortfall with one month remaining in the fiscal year, while interest expenses and other mandatory spending continue to put pressure on the budget.
Against that backdrop, a $5,000 payment to every adult citizen would rank among the largest one-time federal cash-distribution programs in U.S. history.
For now, however, the “Trump dividend” remains a proposal rather than an authorized federal benefit.
Trump says the payments will happen if Republicans retain the House and Senate. Bessent says Treasury has been working on the mechanics “for quite a while” and believes there are ways to prevent the program from increasing the deficit.
What the administration has not yet provided is the element that will determine whether those two claims can be reconciled: a detailed financing plan showing where more than $1 trillion would come from and what authority the government would use to distribute it.
Original article
Comments