Trump’s $5,000 dividend would reignite inflation and swell the U.S. deficit, economists say

September 10, 2026 / 4:17 PM EDT / CBS News

President Trump's vow to send $5,000 to every U.S. adult if the Republican Party keeps control of Congress in the midterm elections would drive up the federal deficit, reignite inflation and alarm investors, according to economists.

After Mr. Trump raised the idea of such a dividend on Wednesday night at the Republican National Committee's midterm convention, Vice President JD Vance told Fox News that the U.S. would fund the payment using tariff revenue collected by the Trump administration, and that it would be aimed at the middle class.

Those tariffs are generating about $125 billion in annual revenue — one-tenth of the $1.25 trillion that would be required to pay $5,000 to each of the nation's roughly 245 million U.S. adults,, Erica York, senior economist with the Tax Foundation's Center for Federal Tax Policy, told CBS News.

Because tariff revenue would fall short, the U.S. would likely need to issue government debt to pay for the dividends, raising the federal deficit to $3 trillion, up from its current level of about $1.8 trillion, York estimated.

The one-time payments would also likely stoke inflation by fueling a surge in consumer spending…

Original source: https://www.cbsnews.com/moneywatch/