Personal Finance
Trump, Musk promote idea of $5,000 ‘DOGE dividend’ checks
Elon Musk and President Donald Trump in the Oval Office at the White House, Feb. 11, 2025.
Andrew Harnik | Getty Images News | Getty Images
As the so-called Department of Government Efficiency looks to cut federal spending, Elon Musk and President Donald Trump have floated the idea that some of any savings could come back to Americans in the form of $5,000 dividend checks.
But experts say it’s too soon to say whether such checks could materialize — and caution that if they did, there could be economic consequences for consumers.
How ‘DOGE dividend’ proposal came to be
Both Musk and Trump boosted a proposal that James Fishback, CEO of investment firm Azoria, posted Feb. 18 on social media platform X, that suggested sending millions of American households checks.
“Americans sent their hard-earned tax dollars to Washington, D.C.,” Fishback told CNBC.com. He said he believes some of “those tax dollars were wasted.”
“There needs to be restitution to correct that,” Fishback said.
The White House released in early February a list of what it called “waste and abuse” of funds at the U.S. Agency for International Development, including $1.5 million to promote diversity, equity and inclusion in Serbia’s workplaces and $70,000 for a DEI musical in Ireland.
Under Trump, DOGE, an advisory group, set an aim to cut $2 trillion in federal spending. However, Musk said in a recent interview that target may be the “best-case outcome” and there may be a “good shot” of cutting half that amount.
In his proposal, Fishback starts from the presumption that DOGE will achieve $2 trillion in cuts to the government. By taking 20% of that total savings — or around $400 billion — that may leave room for around 79 million tax-paying households to each receive a $5,000 tax refund, per Fishback’s plan.
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The idea of direct money may sound familiar to American households, millions of whom received Covid-era stimulus checks. But these payments would be different from the stimulus checks, which work to stimulate the economy at a time of weak gross domestic product growth, Fishback said. Unlike the stimulus checks, the DOGE dividend checks would be only for households that pay federal income taxes, Fishback said.
The idea calls for a dividend closer to something like the Alaska Permanent Fund, in that it would represent a share of collected savings, noted Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.
The rebate would be sent only to households that are “net payers of federal income tax,” per the plan — people who pay more in taxes than they get back. Under those terms, lower-income Americans would not qualify for the return. According to the Pew Research Center, most Americans who have an adjusted gross income of under $40,000 effectively pay no federal income tax.
Fishback, meanwhile, told CNBC.com there’s no minimum income requirement, but Americans would have to file a federal tax return to receive the money. The prospect of the payments may provide an incentive for non-working individuals to re-enter the labor force, according to the plan.
To be sure, the terms of the plan could change if lawmakers decide to consider it.
Trump has welcomed the idea. Musk, who Trump brought on board to implement DOGE, “very much agrees the incentives are in place” to get everyday Americans to report waste, fraud and abuse, Fishback said of a recent conversation he had with the billionaire.
Congress would have to approve payments
Yet to send the DOGE checks out, the Trump administration will need Congress’ approval. Fishback has been meeting with House and Senate members to promote the idea.
Last week, House Speaker Mike Johnson, R-Louisiana, said that while it would be “great” politically, other priorities should come first. Experts say DOGE needs to figure out how much money has been saved before promising people checks in the mail.
“We have a $36 trillion federal debt. We have a giant deficit,” Johnson said. “I think we need to pay down the credit card.”
White House Deputy Chief of Staff Stephen Miller recently said the DOGE checks will be “worked on through the reconciliation process with Congress that’s going underway right now.”
Yet some experts have expressed doubts about the proposal.
“There’s no appropriation for this,” said Elaine Kamarck, a senior fellow at the Brookings Institution who ran the Clinton Administration’s National Performance Review, which implemented cuts in an effort to modernize and improve the federal government’s performance.
“You cannot spend money without Congress telling you that you can spend money,” Kamarck said. “That is illegal.”
It also remains to be seen whether the DOGE initiative can generate enough savings to justify $5,000 payments, Kamarck said. Even with the savings DOGE plans hope to generate, initiatives like curbing immigration will require new or increased spending in other areas.
Without yet having generated meaningful savings, it’s premature to talk about dividend checks, MacGuineas said.
“The bottom line is when you’re running $2 trillion deficits every year, you can’t give away more money in stimulus checks,” MacGuineas said.
“Basically, you’re borrowing more to give back to people, but the borrowing still falls on them,” MacGuineas said.
But if the DOGE were able to generate $1 trillion in savings per year, “absolutely additional savings being returned to taxpayers would make total sense and be desirable,” she said.
‘Wrong time’ to have consumer stimulus?
Inflation spiked in the aftermath of the Covid pandemic and is still higher than the Federal Reserve’s 2% target. Some experts worry that additional direct payments to Americans would contribute to more inflation.
“This is certainly the wrong time to have any sort of consumer stimulus,” said Judge Glock, director of research and senior fellow at the Manhattan Institute. “Inflation remains elevated; any sort of stimulus would exacerbate that inflation.”
However, the amount of money saved under DOGE may not provide payments big enough to fuel inflation, Kamarck said.
The prospect of direct payments comes as Congress may look at extending provisions in the Tax Cuts and Jobs Act later this year.
There are already a number of policies being added to that package that are raising deficit concerns, said Alex Muresianu, senior policy analyst at the Tax Foundation.
“This would be another very large thing to try and squeeze in as well,” he said.
Meanwhile, Fishback maintains the DOGE dividend checks would simply refund Americans money they already contributed through income taxes.
Moreover, the way Americans would likely use an unexpected $5,000 — by paying off debt, saving or investing toward long-term goals like retirement — would not be inflationary, Fishback said, citing a 2019 CNBC survey.
“Every American has the mechanism with DOGE and the incentive with the DOGE dividend to report this waste, fraud and abuse,” Fishback said. “We’ll save even more of our hard-earned tax dollars when we give every American skin in the game.”
The Federal Reserve held interest rates steady at the conclusion of its policy meeting on Wednesday.
In what could be Jerome Powell’s last as chair before President Donald Trump’s yet-to-be-confirmed nominee Kevin Warsh takes the helm, central bankers maintained the federal funds rate in a target range of 3.5% to 3.75%.
Inflation has surged since the war with Iran began, leaving policymakers with limited room to act, according to Sean Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting. “We’re in a kind of suspended animation — between Iran and the Fed transition,” Snaith said.
Before the oil shock, inflation was holding above the Fed’s 2% target but not worsening. Now the jump in energy costs could have longer-term inflationary effects, economists say.
For Americans struggling in the face of higher gas prices and overall affordability challenges, the central bank’s decision to keep interest rates unchanged does little to ease budgetary pressures. “The cavalry isn’t coming anytime soon,” Snaith said.
How the Fed decision impacts you
The Fed’s benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on many consumer borrowing and savings rates.
Short-term rates are more closely pegged to the prime rate, which is typically 3 percentage points above the federal funds rate. Longer-term rates, such as home loans, are more influenced by inflation and other economic factors.
Credit cards
Most credit cards have a short-term rate, so they track the Fed’s benchmark.
After the Fed cut rates three times in the second half of 2025, the average annual percentage rate has stayed just under 20%, according to Bankrate.
“Without Fed rate cuts, there’s not much reason to expect meaningful declines anytime soon, so carrying a balance will remain very expensive,” said Matt Schulz, chief credit analyst at LendingTree.
Mortgage rates
Fixed mortgage rates, on the other hand, don’t directly track the Fed but typically follow the lead of long-term Treasury rates.
Concerns about how the Iran war will impact the U.S. economy have already pushed the average rate for a 30-year, fixed-rate mortgage up to 6.38% as of Tuesday, from 5.99% at the end of February, according to Mortgage News Daily.
That leaves homeowners with existing low mortgage rates “feeling stuck,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “Mortgages, more than any other credit type, work on a churn,” she said, referring to how a dip in rates can boost borrowing activity.
Student loans
Federal student loan rates are also fixed and based in part on the 10-year Treasury note, so most borrowers are somewhat shielded from Fed moves and recent economic uncertainty.
Current interest rates on undergraduate federal student loans made through June 30 are 6.39%, according to the U.S. Department of Education. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year note.
Car loans
Auto loan rates are tied to several factors, including the Fed’s benchmark. Because financing costs remain elevated, new car buyers are taking on longer loans to keep their monthly payments manageable, according to the latest data from Edmunds.
Even so, with the rate on a five-year new car loan near 7%, the average monthly payment on a new car rose to $773 in the first quarter of 2026, an all-time high.
“Car buyers are in a tough spot right now because they’re getting squeezed from both ends: high sticker prices and high interest rates, with neither showing any signs of letting up,” said Joseph Yoon, consumer insights analyst at Edmunds.
“Until the rate picture shifts, buyers will keep stretching loan terms to make payments work, which only adds to the total cost of ownership down the road,” Yoon said.
Savings rates
While the Fed has no direct influence on deposit rates, the yields tend to be correlated with changes in the target federal funds rate. So, although rates on certificates of deposit and high-yield savings accounts have fallen from recent highs, they are holding above the annual rate of inflation.
For now, top-yielding online savings accounts and one-year CD rates pay around 4%, according to Bankrate.
“Yields on high-yield savings accounts and certificates of deposit are down from their peaks of a few years ago, but they’re still strong compared to what we’ve seen for most of the past decade,” Schulz said.
Milan Markovic | E+ | Getty Images
The average tax refund is 11.2% higher this season, compared with about the same period in 2025, according to the latest IRS filing data.
As of April 10, the average refund amount for individual filers was $3,397, up from $3,055 about one year ago, the IRS reported on Friday.
The IRS data reflects about 114 million individual returns received, out of about 164 million expected through Tax Day. Next week’s filing update is expected to include data through the April 15 deadline.
President Donald Trump‘s 2025 legislation, rebranded to the “working families tax cuts,” was a key talking point for Republicans on Tax Day.
With the November midterm elections approaching and Republicans defending slim majorities in Congress, many GOP lawmakers have highlighted Trump’s tax breaks and higher average refunds.
Meanwhile, affordability has been top of mind for many Americans amid rising costs of gas, electricity, food and other living expenses.
For filers who expected a refund this season, nearly one-quarter, or 23%, planned to use the funds to pay down credit card debt, and the same share said they would save the payment, according to the CNBC and SurveyMonkey Quarterly Money Survey, released in April. It polled 3,494 U.S. adults at the end of March.
Who benefited from Trump’s ‘big beautiful bill’
“It’s been a great tax season for the American people,” many of whom have benefited from Trump’s tax breaks, Treasury Secretary Scott Bessent said during a White House press briefing on Wednesday.
More than 53 million filers claimed at least one of Trump’s “signature new tax cuts” — the deductions for tip income, overtime earnings, seniors and auto loan interest — the Department of the Treasury also announced on Wednesday.
Those filers, who claimed the deductions on Schedule 1-A, have seen an average tax cut of over $800, according to the Treasury. Tax cuts can trigger a higher refund or reduce taxes owed, depending on the filer’s situation.
Some filers who itemize tax breaks have also seen benefits from the bigger federal deduction limit for state and local taxes, known as SALT. Trump’s legislation raised that cap to $40,000, up from $10,000, for 2025.
The latest SALT deduction limit change is expected to primarily benefit higher earners, according to a May 2025 analysis of various proposals from the Tax Foundation.
The Treasury has not released data on how many filers have claimed the SALT deduction during the 2026 filing season.
Traders work at the New York Stock Exchange on April 16, 2026.
NYSE
U.S. stocks climbed to record highs on Thursday against a backdrop of war, an oil supply shock and economic forecasts warning of stunted growth amid a protracted conflict.
Many investors may be thinking: Why?
Largely, it’s because the stock market is a barometer of what investors think will happen in the future, rather than an assessment of the present day, according to economists and market analysts.
Investors are essentially shrugging off the Middle East conflict as a blip that will be resolved relatively quickly, they said.
“The stock market isn’t trying to price what’s happening today,” said Joe Seydl, a senior markets economist at J.P. Morgan Private Bank. “The stock market is always trying to price what the world is going to look like six to 12 months from now.”
Why stocks have been ‘resilient’
The S&P 500, a U.S. stock index, fell about 8% in the initial weeks of the Iran war, from the start of the conflict on Feb. 28 to a recent low on March 30.
But stocks have rebounded since then, erasing all losses since the beginning of the war. The S&P 500 closed at an all-time high on Thursday — about 11% higher than its nadir at the end of March. That followed a record close on Wednesday.
“The market has remained very resilient in the face of the war and has rallied strongly on the prospect that it will be resolved,” said Mark Zandi, chief economist at Moody’s.
A ship waits to pass through the Strait of Hormuz following the two-week temporary ceasefire between the US and Iran, which is conditional on the opening of the strait, in Oman on April 8, 2026.
Shady Alassar | Anadolu | Getty Images
And while investors cheered the possibility of a diplomatic off-ramp to the conflict, the temporary ceasefire has appeared tenuous, with the U.S. and Iran each accusing the other of breaking the agreement.
Nations haven’t been able to reach a peace deal ahead of the ceasefire’s end. Vice President JD Vance said U.S. officials left peace talks in Pakistan over the weekend after the Iranian delegation refused to agree to American demands not to develop a nuclear weapon.
The markets ‘have memory’
Ultimately, the stock market is signaling a collective belief that tensions will ratchet down, the war will end in the near term and oil flows through the Strait of Hormuz will normalize, economists said.
That’s largely because investors have been conditioned to believe that President Donald Trump will back off if the economic pain becomes too intense, economists said — the so-called “TACO” trade, shorthand for “Trump always chickens out.”
“Investors strongly believe — and have been conditioned to believe — he’s going to stand down, find a way to pivot, declare victory and move on,” Zandi said.
Trump has pushed back on the notion of backing down, framing his brinkmanship as a savvy negotiating tactic.
Economists pointed to a recent example of this dynamic: in April 2025 during so-called liberation day, when the Trump administration levied a host of tariffs on U.S. trading partners.
Within days — after the stock market had cratered more than 12% — Trump announced a 90-day pause on those tariffs. Stocks then saw one of their biggest daily rallies in history following Trump’s reversal.
Investors remember that Trump often de-escalates geopolitical shocks — which is why they’ve seized on positive headlines that hint at progress in peace talks, for example, Seydl said.
“The markets have memory,” Seydl said.
AI stocks and the ‘tech boom’
Traders celebrating at the New York Stock Exchange on April 15, 2026, as the S&P 500 closed above the 7,000 level for the first time.
NYSE
There are other factors underpinning market resilience during wartime, economists said.
One is the investors’ enthusiasm for artificial intelligence and technology stocks, which account for almost half of the S&P 500’s market capitalization, Zandi said.
“Those stocks run on their own dynamic independent of anything, including the war in Iran,” Zandi said. “I think we would have been down a lot more and it would have been harder for us to recover had it not been for the very, very optimistic perspectives on AI.”
We’re in the middle of a “tech boom” — and investors are likely to remain optimistic until they think the tech cycle has run its course, Seydl said.
More broadly, stock investors are essentially making a bet on the future earnings growth of a company — and the earnings backdrop has been “pretty solid,” Seydl said.
Consumer spending appears to be stable, for example, economists said. And companies are getting a boost to their after-tax earnings from the GOP’s so-called “big beautiful bill,” which, among other things, made it easier to write off investments upfront and therefore reduce their tax liability, Zandi said.
Going forward
Experts said there will be an economic hit from the Iran war, though.
“Despite the recent news of a temporary ceasefire, some damage is already done, and the downside risks remain elevated,” Pierre-Olivier Gourinchas, director of research at the International Monetary Fund, wrote Tuesday.
A protracted conflict risks deep and global economic pain, he wrote.
Even if the conflict is short-lived — as the broad market expects — stocks are unlikely to march much higher until it’s clear the U.S. is on the other side of the war and its economic fallout, Zandi said.
If investors are incorrect, and President Trump doesn’t back down or quickly extricate the U.S. from the war, the stock market may see a “full-blown correction” or worse, Zandi said. A stock market correction is a decline of at least 10% from recent highs.
“Everyone thinks they know what the script is,” Zandi said. “Now they just need to follow the script. If they don’t, the market will have some real problems.”
The uncertainty provides yet another example of why the average investor with a long time horizon should stick to their investment plan and ignore the noise, experts said.
“Trying to time the market is very difficult if not impossible for the average investor,” Seydl said. “It’s better to take a long-term perspective and ride out bouts of volatility.”
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