Trump's plan for $5G payments faces political, economic obstacles

WASHINGTON — President Donald Trump's new pledge to pay $5,000 to every U.S. adult citizen if Republicans retain control of Congress after this year’s midterm elections is drawing skepticism from fiscal policy experts and legal scholars who say the money is unlikely to materialize.

Trump, speaking Wednesday on the first night of a two-day Republican midterm convention in Dallas, said he would issue a "Trump Dividend" to every adult citizen if the GOP keeps control of both the Senate and House, in an election that historically has trended against the party in power.

"I will issue a dividend to every adult citizen in the United States of America for $5,000, very much like a successful company will do a cash distribution to its shareholders," Trump said.

Only Congress has the authority under the U.S. Constitution to appropriate such spending, and even if Republicans were to keep their majority, Trump would need to convince lawmakers to approve what would amount to about $1.2 trillion in new spending.

Rep. Nick LaLota (R-Amityville), the only U.S. House member from Long Island on the Appropriations Committee, suggested he could back it.

"I’ll work with anyone to ensure that hardworking U.S. citizens keep more of their own money," LaLota told Newsday.

But budget policy experts raised concerns that the plan could spur more inflation and add to the national debt.

"This proposal is fiscally dangerous, economically backward, and fundamentally unserious," said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, in a statement. "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."

Few details

Trump did not specify how he would pay for the dividends, but in his speech he did touch on the revenue raised from his tariff hikes on imported goods. But MacGuineas said even that amount — roughly $200 billion — would not be enough to cover $5,000 checks for every voting-age citizen.

"Debt is now as large as our entire economy, deficits are running $2 trillion per year, inflation is about 3.5%, and the 10-year Treasury yield is approaching 5%," MacGuineas said. "This half-baked political scheme would make this all worse — exploding the deficit, ginning up inflation, and further driving up the cost of borrowing throughout the economy."

The White House has not provided details of Trump’s plan, but Vice President JD Vance, in interviews with Fox News after Trump’s speech, said broadly that there would likely be eligibility criteria to exclude wealthy individuals.

"I don’t think it’s a controversial idea," Vance said.

But the idea also raises questions about whether Trump is running afoul of federal election laws, which ban payment in exchange for votes for or against a particular candidate. Legal experts contend Trump's pledge is likely protected by the First Amendment, and it's unlikely, as a sitting president with presidential immunity, he would be successfully prosecuted if watchdog groups challenge him in court.

Legal questions

Michael Dorff, a constitutional law professor at Cornell Law School, in a phone interview said Trump's proposal falls in "a gray area."

"Politicians routinely promise that they will do things that voters would like if they win the election," Dorff said. "So you might say, ‘Well, what if a candidate ran on a platform of tax cuts or spending promises?’ In some sense, that’s what this is, and if you think about it in those terms, then it’s legal.

"What’s different about this from the usual promise is that the usual promise is only implicitly contingent on the politician winning. Here, Trump is saying, ‘Even if the Democrats wanted to go along with me, if they control the House or the Senate, then I won’t pursue this proposal.’ So that makes it a little less like a routine promise by a politician to do something for voters."

William Hoagland, senior vice president at the Bipartisan Policy Center in Washington, D.C., said while the idea would be legal if enacted by Congress, it is an "unserious, economically unsound policy that Congress should never agree to enact or even consider."

Hoagland explained that if adults are defined as Americans 18 and older, that would equal 259 million adults times $5,000, adding up to nearly $1.3 trillion.

He said, “$1.3 trillion is almost equivalent to the stimulus in the [American Rescue Plan] that economists concluded contributed to high inflation." He added, "Given the deficit for 2027 is likely to reach nearly $2.2 trillion, this would be a 73% increase in the deficit in one year."

Marty Cantor, director of the Long Island Center for Socio-Economic Policy and a former Suffolk County economic development commissioner, said the money would help Long Islanders feeling economic pressure from rising gas prices and groceries.

“$5,000 would mean a 6% raise for average Long islanders with average per-capita income of $85,000," Cantor told Newsday, adding that "it would mean more for those earning below $85,000."

This is not the first time Trump has floated the idea of a dividend. Last November, he proposed giving adults $2,000 dividend checks using money collected from his widespread tariff plan, but the proposal never materialized, even with Republicans in control of Congress.

Meanwhile, Long Islanders and other New Yorkers will not be among an estimated 1 million people in 30 other states that will receive a separate refund of $500 per person — refunds the president said Thursday were related to Affordable Care Act overcharges by the Democratic administration of President Joe Biden.

Those payments, which are estimated to total about $500 million nationally, would arrive just weeks before the midterm elections for Congress. But the refunds would only be available to enrollees of Obamacare — the informal name of the ACA — in 30 states that, unlike New York, do not operate their own health insurance exchanges. These are states that instead rely on the federally run HealthCare.gov for residents to buy insurance.

By Laura Figueroa Hernandez

laura.figueroa@newsday.com,billy.house@newsday.com@Laura_Figueroa,

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.