Bessent Defends Trump’s $5,000 Giveaway, Denies It Will Increase Deficit

Treasury Secretary Scott Bessent on Tuesday defended President Trump’s plan to send each American adult $5,000 if Republicans maintain congressional control in the midterm elections, saying the $1.2 trillion proposal will not increase the country’s deficit.

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Bessent was pressed on the proposal, which the president has dubbed a “Trump dividend,” during his testimony before the House Committee on Financial Services. Asked by Representative Emanuel Cleaver (D., Mo.) whether the administration would go through Congress before sending out the money, the Treasury secretary suggested congressional approval may be unnecessary.

“We are currently examining that idea at Treasury and when the Republicans win in November, if we need to, I look forward to working with [House] Speaker Johnson on it,” Bessent replied.

Cleaver then asked Bessent to confirm that the plan is “real” and has been researched. 

“The president’s intent is very real,” Bessent confirmed. 

“As Treasury secretary, do you have any apprehensions about a $1.8 trillion deficit that would be impacted even more negatively if every American receives $5,000 from the federal government?” Cleaver asked.

“Well, first of all, 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,” Bessent said.

Representative Juan Vargas (D., Calif.) pressed Bessent on his claims that there are ways to implement the payments without increasing the deficit, asking him to explain further.

“That is in process right now,” Bessent said. “I am not ready to discuss it at the present, but at Treasury, we have been working on it for quite a while.”

The nonpartisan Committee for a Responsible Federal Budget estimates Trump’s proposal would cost $1.2 trillion. While Trump has said the checks will be funded by tariff revenue, tariffs have generated less than $200 billion annually, according to CRFB, and that revenue is already incorporated into existing deficit projections. The group’s projection suggests the proposal could push the annual federal deficit to roughly 9 to 10 percent of GDP next year. 

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While Bessent was not asked and did not say whether he expects the proposal to have an impact on inflation, CRFB further estimates that the spending could cause 1.5 percentage points of additional inflation; other economists have declined to predict a specific figure but have warned the proposal would likely cause an increase in inflation.

For context, the proposed $1.2 trillion in spending is larger than all three rounds of individual Covid stimulus checks combined.

Just days before Trump debuted his dividend plan earlier this month, Bessent told CNBC that former President Biden and his allies “torched the American people” with their spending.

“Almost 50 percent of the great inflation came from the out-of-control spending that went on then,” he said.

During the hearing on Tuesday, Representative Jim Himes (D., CT) argued Trump’s plan amounted to a “bribe.”

“I have no doubt that if I walked down there right now and said, ‘I will pay you $5,000 if you focus your buying on the three-year treasury,’ that conversation would end with me in handcuffs,” he said.

Many of Trump’s Republican allies have sought to refute similar concerns in recent days.

“President Trump isn’t saying that, if we win, we’ll do this,” Pat Fallon (R., Texas) told Fox News. “He’s saying we’ll be in a position to do this because we’ll have the votes to do it.”

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