<p>President Donald Trump’s proposal to provide $5,000 to individuals if Republicans win in November faces several logistical and political challenges.</p>
<p>Trump announced at the GOP midterm convention that if Republicans retain control of the House and Senate, the federal government would issue a $5,000 check to every adult citizen, referring to it as a “dividend” from the country’s economic success.</p>
<p>He specified that the funds would need to be spent within the United States.</p>
<p>However, this proposal poses significant obstacles. Treasury Secretary Scott Bessent indicated it might be feasible to distribute the funds without Congressional approval, although experts consider this unlikely.</p>
<p>During a testimony on Capitol Hill, Rep. Emanuel Cleaver (D-MO) questioned Bessent about the feasibility of making such payments without Congressional consent. Bessent mentioned he would consult with House Speaker Mike Johnson (R-LA) on the matter.</p>
<p>“We are currently examining that at Treasury,” Bessent stated, adding that he looks forward to collaborating with Speaker Johnson if necessary.</p>
<p>Ryan Young, a senior economist at the Competitive Enterprise Institute, noted that Congress holds the power of the purse, meaning any payments would require legislative approval rather than just a presidential directive.</p>
<p>This constitutional requirement has previously challenged presidents, including Joe Biden, who faced legal obstacles when attempting to implement significant spending measures.</p>
<p>Young pointed out that any substantial payments would likely face legal challenges if not approved by Congress.</p>
<h2>Concerns on Capitol Hill</h2>
<p>Obtaining Congressional approval for the $5,000 payments would require considerable political capital, especially given the national debt has reached $40 trillion and inflation is rising. Lawmakers may be reluctant to associate themselves with additional debt, particularly during a time of high bond yields and interest rates.</p>
<p>Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, expressed skepticism about Congress passing legislation for the $5,000 payments, stating there is “zero” chance of it happening.</p>
<p>She questioned the source of funding for such payments, emphasizing that the term “dividend” implies a return on investment, which does not apply in this case.</p>
<p>According to estimates, providing $5,000 to every adult in the U.S. could cost the Treasury approximately $1.3 trillion, surpassing the $870 billion spent on military programs in the last fiscal year.</p>
<p>There are potential methods to reduce this cost, such as implementing income caps to limit the number of recipients.</p>
<p>Mark Hamrick, chief economic analyst for the Hamrick Brief, stated that it is “impossible” for such payments not to increase the deficit.</p>
<p>Bessent suggested there might be ways to implement the payments without adding to the national debt, although he did not provide specifics.</p>
<p>Concerns about inflation complicate the proposal further. Many economists attribute the current inflation to stimulus spending during the COVID-19 pandemic, which increased demand significantly.</p>
<p>Experts warned that distributing over $1 trillion in checks without corresponding tax increases or spending cuts would likely exacerbate inflationary pressures.</p>
<p>Hamrick noted that while some inflationary impact might be mitigated if households save the payments, it is likely that most would be spent quickly.</p>
<p>Broader economic issues also complicate the potential for Congress to approve such payments, particularly with impending deadlines for Social Security and Medicare reforms.</p>
<p>De Rugy argued that instead of issuing checks, Congress should focus on reforming entitlement spending, as the Social Security trust fund is projected to deplete by 2032, necessitating a 22% cut in spending.</p>
<p>Zach Halaschak is the economics reporter for the Washington Examiner.</p>