November 24, 2025 • 18 mins
Under new pressures over inflation and affordability, President Donald Trump has been talking up a plan to share tariff revenues with Americans, in the form of $2,000 checks. But there are several major problems with this plan — and he’s lacking support among some of his most ardent allies.
On today’s Big Take episode, host Sarah Holder is joined by Bloomberg senior national political reporter Nancy Cook and US Treasury reporter Dan Flatley to discuss how Trump’s latest proposal fits into the economic debate that could define midterm elections – and how the Supreme Court, the Republican party and Trump’s own cabinet could throw a wrench in his plans.
Read more:
- Trump’s $2,000 Tariff ‘Dividend’ Marks Throwback to Covid Checks
- Trump’s $2,000 Tariff Check Idea Draws Republican Resistance
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Lately, President Donald Trump has been talking about in unconventional
economic policy idea, the tariffs.
Speaker 3 (00:16):
Allow us to give a dividend if we want to
do that now.
Speaker 2 (00:20):
On November ninth, the President posted about the idea on
Truth Social A dividend of at least two thousand dollars
a person, not including high income people, will be paid
to everyone, he wrote. He brought it up again a
few days later, so we're.
Speaker 3 (00:35):
Going to be doing a dividend which people will enjoy
and spend and do what they want.
Speaker 4 (00:40):
Essentially, he's talked about taking some of the tariff revenue
that the US has collected and using that to issue
two thousand dollars payments directly to US citizens.
Speaker 2 (00:50):
That's Dan Flatley, a US Treasury reporter for Bloomberg.
Speaker 4 (00:53):
The idea would be to take some of that revenue
and redistribute it to families making under one hundred thousand
dollars right or individuals making under a hundred thousand dollars.
Speaker 2 (01:03):
Since Trump began his trade war in April, the US
has made money from tariffs. The Treasury Department says the
US has collected one hundred and ninety five billion dollars
in customs duties in the twenty twenty five fiscal year.
But there's a small problem with the math. The Yell
Budget Lab estimated that it would actually cost four hundred
(01:24):
and fifty billion dollars to pay out dividends in the
way Trump is proposing. The Committee for a Responsible Federal
Budget estimated that these dividends could cost six hundred billion dollars.
Speaker 5 (01:36):
And so this would be sort of a money loser,
regardless of whether the budget it's four fifty six hundred.
Speaker 2 (01:43):
That's Nancy Cook, a White House reporter for Bloomberg.
Speaker 5 (01:46):
It's going to cost more money than they're bringing in.
Speaker 2 (01:49):
And that's just one of the unanswered questions about how
these two thousand dollars dividends would work. It's also not
clear how the administration would act actually go about paying
the money to Americans. In a recent interview with ABC News,
Treasury Secretary Scott Bessont was asked by George Stephanopoulos about
(02:09):
whether there's a plan for that.
Speaker 1 (02:11):
I haven't spoken to the President about this yet, but
you know, it could. The two thousand dollars dividend could
come in lots of forms in lots of ways, George,
you know, it could be just the tax decreases that
we are seeing.
Speaker 2 (02:26):
Trump meanwhile, insists the dividend would be paid out in checks.
Speaker 3 (02:31):
That's not made up. That's real money that comes from
other countries.
Speaker 2 (02:35):
But there's another big hurdle, the politics.
Speaker 5 (02:38):
It's a tricky idea politically, forget like sort of the
economics of it. It's not something that Trump can just do.
Speaker 4 (02:44):
You know.
Speaker 2 (02:44):
Latterally, I'm Sarah Holder and this is the big take
from Bloomberg News today on the show, breaking down Trump's
proposal to dole out tariff revenue to Americans, how it
fits into the ability debate that will define the midterms,
and the many obstacles to making it a reality.
Speaker 4 (03:10):
There's lots of economic implications for this. There's lots of
practical implications for this. There's lots of things that we
can sort of get into.
Speaker 2 (03:17):
Dan Flatley is a treasury reporter for Bloomberg. He's been
chasing down the details of Trump's dividend check proposal, starting
with how the administration would pay for it. Trump's idea
is to use the money the US has collected in
tariff revenue.
Speaker 4 (03:32):
There's no question that US has brought in a lot
of money in this fashion. The last we looked was
the end of the fiscal year, which ended September thirtieth.
It's the fiscal year for twenty twenty five, one hundred
and ninety five billion dollars worth of customs duties were collected.
Not small change, but it's a fraction really of the
overall federal budget, which is, you know, trillions of dollars.
Speaker 2 (03:53):
But there are lots of competing priorities for that money.
Speaker 4 (03:57):
This money has been earmarked or lots of different things.
People have talked about using it primarily to pay down
the deficit, reduce the federal debt. Scott Besstt, the Treasury Secretary,
has talked about bringing down the deficit to GDP ratio,
which is a key metric for judging a country's economic health. Basically,
everybody kind of wants to get their hands on this money,
(04:19):
and it makes it a little bit complicated to then
start to say, oh, we're going to start cutting checks
using this revenue stream, because there's only so much that
the government is going to be bringing in over the
next few years. Estimates are around about three hundred billion
a year.
Speaker 2 (04:33):
Trump has claimed that he doesn't have to choose between
bringing down the deficit and issuing dividend checks that he
can do both.
Speaker 3 (04:40):
Now we're going to do a dividend, and we're also
going to be reducing debt we have because of fighting
and others. We have a thirty seven trigger in the debt.
Speaker 2 (04:51):
Since Trump announced sweeping global tariffs on April second, the
national debt has risen by five point five percent. The
US hit thirty eight it's billion dollars in debt in October.
But for everyday voters, bringing down the deficit sounds a
lot more abstract than receiving a check in the mail,
And Nancy Cook, who's covered Trump since his first term, says,
(05:13):
that's a political calculus this administration is well aware of.
Speaker 5 (05:17):
They did cut stimulus checks when Trump was president. At
the beginning of COVID, Biden did the same thing. The
stimulus checks were really born out of the fact that
the economy was in the tank and unemployment was high,
and so those stimulus checks were really given to people
as a way to kind of patch over what was
just a really unusual time. I think Trump always likes
(05:38):
the idea though, of kind of a simple branding I mean,
it's like you send people two thousand dollars checks. The
average American is not going to know that it came
from tariff revenue. You know, they're not going to care.
They're just going to see that like Trump sent them
a check, and then the hope for the Republicans would
be they would vote accordingly in the midterms. And so
I think politically that's how the White House is thinking
(06:00):
about this.
Speaker 2 (06:00):
So what is Trump's play here as he doubles down
on this idea. What do you think he's trying to accomplish.
Is the main priority getting his name on a check again?
Speaker 5 (06:13):
Yes, I mean just the short answers, Yes, he wants
his name on a check. Trump is just really on
the defensive right now. He has not had a good
few weeks between the Epstein files and Republicans sort of
not going along on the hill with his idea of
the filibuster. Democrats swept a bunch of elections in early November,
and so he is just looking for ways to juice
the economy ahead of the midterms. And we've seen him
(06:35):
do that with the check's idea. We've seen them have
to roll back some tariffs on some key agricultural products, coffee, bananas, beef,
you know, just to try to give people a little
bit more relief at the grocery store.
Speaker 3 (06:47):
I know.
Speaker 2 (06:47):
He was even, you know, floating the idea of a
fifty year mortgage, which people also have questions about the
feasibility and the viability of. But it seems to be
part of this broader desperation to address affordability right now.
Speaker 5 (06:58):
Absolutely, I think part of the problem is that there's
both the policy considerations, like how do we bring down prices,
but how do we also make people feel like we're
taking it seriously. Trump this week at an investment forum
with the Saudi's who were in town. You know, he
had this amazing line where he said, sort of dismissively,
like Democrats came up with this idea of affordability, but they.
Speaker 6 (07:21):
Came up with the new word affordability. They look at
the we were all about affordability, and everyone assumes that
that meant said, no, their prices were high.
Speaker 5 (07:31):
In that same forum, he said, the stock market is
doing great.
Speaker 4 (07:34):
Since the election.
Speaker 6 (07:35):
The stock market has set and this is a little
more than nine months forty six all time record has
and the growth is now amazing and it's lifting up.
Speaker 5 (07:47):
But that stuff doesn't always trickle down to people when
they're trying to buy a home or go to the
grocery store and their groceries are fifty dollars more expensive
than they were three years ago. He is having a
hard time, I think, wrapping his mind around the idea
that that Americans don't view the economy as a golden
age like he does.
Speaker 2 (08:04):
Issuing two thousand dollars checks could offer immediate relief to
Americans struggling to afford basics right now, just like the
COVID stimulus checks were a boost during a previous period
of economic turmoil. But there was also a downside to
all that Pandemic era stimulus.
Speaker 5 (08:21):
Mainstream economists agree that that really contributed to the historically
high inflation that we saw. Just that amount of money
pumped into the economy.
Speaker 2 (08:30):
All that extra money circulating around the economy in twenty
twenty one and twenty twenty two set off a flurry
of consumer spending. While pandemic disruptions constrain supply, economists say
the sudden demand contributed to driving prices up, fueling inflation
that's still here today, and some economists feared these dividends
(08:50):
could do a similar thing.
Speaker 5 (08:52):
There would be a concern if they spent four hundred
and fifty billion two six hundred billion dollars on these
stimulus checks at a point when prices haven't still totally
come down, that that would cause more inflation again. And
so it's interesting that, you know, one of Trump's sort
of go to policy moves to deal with higher prices
and people's, you know, people being mad about the state
(09:14):
of the economy is to cut checks, which could actually
just add to more inflation.
Speaker 2 (09:22):
After the break, we talk about the other hurdles facing
this idea and how Trump might navigate them.
Speaker 3 (09:38):
When I spend when I pay people two thousand dollars
each for low and moderate incumbentment income people, everybody but
the rich, we'll get this.
Speaker 2 (09:48):
President Donald Trump's proposal to send millions of Americans dividend
checks is part of the administration's effort to get people
feeling good about the economy again. But last time stimulus
checks w to millions of Americans, economists say they played
a role in creating the inflation we're dealing with today.
Speaker 5 (10:06):
And that's something that federal government has been wrestling with.
The federal Reserve has been wrestling with and it's not
something that they've really been able to solve, and Americans
have been facing higher prices for the last several years
at this point.
Speaker 2 (10:18):
That's White House reporter Nancy Cook again. The fear that
a new wave of two thousand dollars checks could send
prices even higher is just one of the reasons that
lots of people, from prominent economists to members of the
Trump administration and the Republican Party have been lukewarm on
the proposal.
Speaker 4 (10:35):
People are very skeptical of this idea.
Speaker 2 (10:38):
Treasury reporter Dan Flatley, and I.
Speaker 4 (10:40):
Haven't spoken to him about it, but I even detect
a little bit of hesitancy in Secretary Besson's comments on
this issue. He sort of floated the idea of Americans
saving these checks if they are issued.
Speaker 2 (10:53):
What Treasury Secretary Scott Besson was implying is that if
people put that money into savings, they're spending might not
drive inflation. Bessen has also suggested using the tariff revenue
to offset tax cuts instead of paying it out to
people directly. Meanwhile, lawmakers haven't jumped at the chance to
back this plan either.
Speaker 4 (11:12):
My colleagues who cover Capitol Hill. Have spoken to a
lot of lawmakers who are very skeptical about this, and
you really would need, according to the letter of the law,
the consent of Congress or legislation passed by Congress in
order to do this. If you're going to have this
tariff revenue coming in, most lawmakers would prefer to see
that go directly toward bringing down the deficit, paying down
the debt, and rebalancing the US's books over time, rather
(11:36):
than injecting this money into the economy in a way
that could spark additional inflation and have very unpredictable effects
in terms of how this would all play out.
Speaker 2 (11:46):
And just to be clear, Nancy, does Trump need Congress's
approval to follow through with this proposal.
Speaker 5 (11:52):
Yes, he would need congressional approval. One of his aids
this week at an event the Bloomberg government did said
that they were looking at into ways that he could
do to unilaterally, but realistically, at this point he needs
congressional approval. And Dan is right. Senate Republicans people on
the Hill are very cool to this idea. This is
not something that they're interested in doing.
Speaker 2 (12:12):
Well. I want to talk about another potential hurdle to
getting these checks out, which is the Supreme Court case
evaluating whether a large swath of Trump's tariffs are even legal.
Dan if tariffs are rolled back ruled illegal, does all
that money get clawed back too, And what would that
mean for a dividend like this.
Speaker 4 (12:31):
Yeah, we don't exactly know what the process will look
like if the Supreme Court rules against Trump's tariffs. So,
in other words, if the Supreme Court decides that Trump
misused his emergency authorities in order to put these tariffs
into place, there is a school of thought that says
the government would have to refund this money to the
(12:52):
importers who have paid these tariffs up to this point.
There's also another school of thought that says the court
could make it prospective words, the government could keep the
money as collected so far, but going forward would no
longer be able to collect the revenue from tariffs cet
or implemented using these authorities. So either way, there's going
to be a drop in the amount of revenue that
(13:13):
the government is going to be collecting. If the government
has to pay back a substantial portion of that money,
it could make things very tricky.
Speaker 5 (13:20):
The political people that I speak to in the Trump
Orbit largely believe that this is one case in which
the Supreme Court will not side with Trump, and.
Speaker 2 (13:28):
Even in opening arguments, they seem quite skeptical, exactly.
Speaker 5 (13:31):
You can hear that in the Justice's own questions about
the case, and so they're sort of working from the
idea that it will get struck down. These tariffs are
such a big part of what he firmly believes will
make the economy better, and he's always viewed tariff revenue
as a way like if he has this extra money,
then he could do different things on tax policy, and
so it will just be another big blow to his
(13:52):
economic agenda ahead of the twenty twenty six men terms.
Speaker 2 (13:56):
Is there any sort of three D chests happening here
where if two thousand dollars checks using this tariff revenue
get sent out, it would be harder to claw back
tariff revenue in the case that the Supreme Court does
not rule his way.
Speaker 4 (14:10):
I think that there is a little bit of strategizing
happening on the part of the White House when it
comes to this case. You brought up one potential justification,
but one that we hear a lot from administration officials
is that the president needs to retain these authorities and
the ability to impose tariffs for national security reasons. He
needs to be able to use it as leverage when
(14:32):
it comes to bargaining over different things with other countries.
So whether the two thousand dollars checks play into this
court case directly is sort of an open question. But
there's certainly a number of justifications that the administration has
made for why it's important for the president to have
this ability and to have flexibility and how he uses
it that others have argued that the law does not
(14:52):
give him.
Speaker 2 (14:53):
Well, how is the Federal Reserve thinking about this? Has
Jron Powell commented on this idea, It impact how the
Fed thinks about the urgency of addressing inflation. Again, if
this were to happen or seem more possible to have.
Speaker 4 (15:08):
In what the Fed is looking at at the moment
is a very mixed picture, right. So you have inflation
that has come down obviously from the high rates that
we saw a couple of years ago, but is still
stubbornly around that three percent range. You have a job
market which is slowing a little bit at a time,
and you have Federal Reserve officials who are trying to
(15:30):
decide whether or not they want to do another twenty
five basis point cut in December, notwithstanding the pressure that
Pow is getting from President Trump to lower interest rates
and lower them quickly, but also to try to figure
out how to navigate this sort of set of mixed signals,
also at a time, by the way, where data is
a little bit behind because of the government shutdown and
(15:52):
other things are happening in the economy. So it doesn't
make Pal's job any easier, and it also makes Secretary
Beston's job a little bit more difficult as he tries
to interview successors to Pal and present those to Trump.
Speaker 2 (16:05):
Trump has said he wants these checks to go out
sometime next year, and there's a lot in flux that
Powell's termus FED chair is said to end in May
of twenty twenty six, and there's this process underway to
name his successor. As you mentioned, Dan, Secretary Bessant is
deeply involved in both these efforts. So what will you
be looking out for in the economy and from the
(16:26):
White House and from the Treasury as we try to
understand whether and when these checks will actually.
Speaker 4 (16:33):
Go out voters? As Nancy has talked about were unhappy
with the state of the economy. Poles heading into the
last presidential election showed that they trusted Trump to a
certain extent, more than Vice President Harris. I think that
Trump launched on a very ambitious economic agenda, overturning years
of received wisdom about how the economy works, basically on
(16:58):
his own gut instincts. So what we're seeing now is
some feedback from that experiment, and how that plays into
the midterm elections is going to be very interesting. I
was at an event with jd Vance where he was
talking about needing more patients from voters as the Trump
administration tries to implement this wholesale economic reimagining. The problem
(17:19):
is is that people are already hurting, right, and so
I think that it's a question of how much patients
voters are really going to have with this really ambitious
remaking of the US economy. And I think there's going
to be a lot of messaging around that, and who
does that more effectively will be something that will be
determinative of the midterm elections.
Speaker 2 (17:43):
This is the Big Take from Bloomberg News. I'm Sarah Holder.
To get more from the Big Take and unlimited access
to all of bloomberg dot com. Subscribe today at bloomberg
dot com. Slash podcast offer thanks for listening, we'll be
back tomorrow, and
Speaker 5 (18:01):
You slay mind.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Lately, President Donald Trump has been talking about in unconventional
economic policy idea, the tariffs.
Speaker 3 (00:16):
Allow us to give a dividend if we want to
do that now.
Speaker 2 (00:20):
On November ninth, the President posted about the idea on
Truth Social A dividend of at least two thousand dollars
a person, not including high income people, will be paid
to everyone, he wrote. He brought it up again a
few days later, so we're.
Speaker 3 (00:35):
Going to be doing a dividend which people will enjoy
and spend and do what they want.
Speaker 4 (00:40):
Essentially, he's talked about taking some of the tariff revenue
that the US has collected and using that to issue
two thousand dollars payments directly to US citizens.
Speaker 2 (00:50):
That's Dan Flatley, a US Treasury reporter for Bloomberg.
Speaker 4 (00:53):
The idea would be to take some of that revenue
and redistribute it to families making under one hundred thousand
dollars right or individuals making under a hundred thousand dollars.
Speaker 2 (01:03):
Since Trump began his trade war in April, the US
has made money from tariffs. The Treasury Department says the
US has collected one hundred and ninety five billion dollars
in customs duties in the twenty twenty five fiscal year.
But there's a small problem with the math. The Yell
Budget Lab estimated that it would actually cost four hundred
(01:24):
and fifty billion dollars to pay out dividends in the
way Trump is proposing. The Committee for a Responsible Federal
Budget estimated that these dividends could cost six hundred billion dollars.
Speaker 5 (01:36):
And so this would be sort of a money loser,
regardless of whether the budget it's four fifty six hundred.
Speaker 2 (01:43):
That's Nancy Cook, a White House reporter for Bloomberg.
Speaker 5 (01:46):
It's going to cost more money than they're bringing in.
Speaker 2 (01:49):
And that's just one of the unanswered questions about how
these two thousand dollars dividends would work. It's also not
clear how the administration would act actually go about paying
the money to Americans. In a recent interview with ABC News,
Treasury Secretary Scott Bessont was asked by George Stephanopoulos about
(02:09):
whether there's a plan for that.
Speaker 1 (02:11):
I haven't spoken to the President about this yet, but
you know, it could. The two thousand dollars dividend could
come in lots of forms in lots of ways, George,
you know, it could be just the tax decreases that
we are seeing.
Speaker 2 (02:26):
Trump meanwhile, insists the dividend would be paid out in checks.
Speaker 3 (02:31):
That's not made up. That's real money that comes from
other countries.
Speaker 2 (02:35):
But there's another big hurdle, the politics.
Speaker 5 (02:38):
It's a tricky idea politically, forget like sort of the
economics of it. It's not something that Trump can just do.
Speaker 4 (02:44):
You know.
Speaker 2 (02:44):
Latterally, I'm Sarah Holder and this is the big take
from Bloomberg News today on the show, breaking down Trump's
proposal to dole out tariff revenue to Americans, how it
fits into the ability debate that will define the midterms,
and the many obstacles to making it a reality.
Speaker 4 (03:10):
There's lots of economic implications for this. There's lots of
practical implications for this. There's lots of things that we
can sort of get into.
Speaker 2 (03:17):
Dan Flatley is a treasury reporter for Bloomberg. He's been
chasing down the details of Trump's dividend check proposal, starting
with how the administration would pay for it. Trump's idea
is to use the money the US has collected in
tariff revenue.
Speaker 4 (03:32):
There's no question that US has brought in a lot
of money in this fashion. The last we looked was
the end of the fiscal year, which ended September thirtieth.
It's the fiscal year for twenty twenty five, one hundred
and ninety five billion dollars worth of customs duties were collected.
Not small change, but it's a fraction really of the
overall federal budget, which is, you know, trillions of dollars.
Speaker 2 (03:53):
But there are lots of competing priorities for that money.
Speaker 4 (03:57):
This money has been earmarked or lots of different things.
People have talked about using it primarily to pay down
the deficit, reduce the federal debt. Scott Besstt, the Treasury Secretary,
has talked about bringing down the deficit to GDP ratio,
which is a key metric for judging a country's economic health. Basically,
everybody kind of wants to get their hands on this money,
(04:19):
and it makes it a little bit complicated to then
start to say, oh, we're going to start cutting checks
using this revenue stream, because there's only so much that
the government is going to be bringing in over the
next few years. Estimates are around about three hundred billion
a year.
Speaker 2 (04:33):
Trump has claimed that he doesn't have to choose between
bringing down the deficit and issuing dividend checks that he
can do both.
Speaker 3 (04:40):
Now we're going to do a dividend, and we're also
going to be reducing debt we have because of fighting
and others. We have a thirty seven trigger in the debt.
Speaker 2 (04:51):
Since Trump announced sweeping global tariffs on April second, the
national debt has risen by five point five percent. The
US hit thirty eight it's billion dollars in debt in October.
But for everyday voters, bringing down the deficit sounds a
lot more abstract than receiving a check in the mail,
And Nancy Cook, who's covered Trump since his first term, says,
(05:13):
that's a political calculus this administration is well aware of.
Speaker 5 (05:17):
They did cut stimulus checks when Trump was president. At
the beginning of COVID, Biden did the same thing. The
stimulus checks were really born out of the fact that
the economy was in the tank and unemployment was high,
and so those stimulus checks were really given to people
as a way to kind of patch over what was
just a really unusual time. I think Trump always likes
(05:38):
the idea though, of kind of a simple branding I mean,
it's like you send people two thousand dollars checks. The
average American is not going to know that it came
from tariff revenue. You know, they're not going to care.
They're just going to see that like Trump sent them
a check, and then the hope for the Republicans would
be they would vote accordingly in the midterms. And so
I think politically that's how the White House is thinking
(06:00):
about this.
Speaker 2 (06:00):
So what is Trump's play here as he doubles down
on this idea. What do you think he's trying to accomplish.
Is the main priority getting his name on a check again?
Speaker 5 (06:13):
Yes, I mean just the short answers, Yes, he wants
his name on a check. Trump is just really on
the defensive right now. He has not had a good
few weeks between the Epstein files and Republicans sort of
not going along on the hill with his idea of
the filibuster. Democrats swept a bunch of elections in early November,
and so he is just looking for ways to juice
the economy ahead of the midterms. And we've seen him
(06:35):
do that with the check's idea. We've seen them have
to roll back some tariffs on some key agricultural products, coffee, bananas, beef,
you know, just to try to give people a little
bit more relief at the grocery store.
Speaker 3 (06:47):
I know.
Speaker 2 (06:47):
He was even, you know, floating the idea of a
fifty year mortgage, which people also have questions about the
feasibility and the viability of. But it seems to be
part of this broader desperation to address affordability right now.
Speaker 5 (06:58):
Absolutely, I think part of the problem is that there's
both the policy considerations, like how do we bring down prices,
but how do we also make people feel like we're
taking it seriously. Trump this week at an investment forum
with the Saudi's who were in town. You know, he
had this amazing line where he said, sort of dismissively,
like Democrats came up with this idea of affordability, but they.
Speaker 6 (07:21):
Came up with the new word affordability. They look at
the we were all about affordability, and everyone assumes that
that meant said, no, their prices were high.
Speaker 5 (07:31):
In that same forum, he said, the stock market is
doing great.
Speaker 4 (07:34):
Since the election.
Speaker 6 (07:35):
The stock market has set and this is a little
more than nine months forty six all time record has
and the growth is now amazing and it's lifting up.
Speaker 5 (07:47):
But that stuff doesn't always trickle down to people when
they're trying to buy a home or go to the
grocery store and their groceries are fifty dollars more expensive
than they were three years ago. He is having a
hard time, I think, wrapping his mind around the idea
that that Americans don't view the economy as a golden
age like he does.
Speaker 2 (08:04):
Issuing two thousand dollars checks could offer immediate relief to
Americans struggling to afford basics right now, just like the
COVID stimulus checks were a boost during a previous period
of economic turmoil. But there was also a downside to
all that Pandemic era stimulus.
Speaker 5 (08:21):
Mainstream economists agree that that really contributed to the historically
high inflation that we saw. Just that amount of money
pumped into the economy.
Speaker 2 (08:30):
All that extra money circulating around the economy in twenty
twenty one and twenty twenty two set off a flurry
of consumer spending. While pandemic disruptions constrain supply, economists say
the sudden demand contributed to driving prices up, fueling inflation
that's still here today, and some economists feared these dividends
(08:50):
could do a similar thing.
Speaker 5 (08:52):
There would be a concern if they spent four hundred
and fifty billion two six hundred billion dollars on these
stimulus checks at a point when prices haven't still totally
come down, that that would cause more inflation again. And
so it's interesting that, you know, one of Trump's sort
of go to policy moves to deal with higher prices
and people's, you know, people being mad about the state
(09:14):
of the economy is to cut checks, which could actually
just add to more inflation.
Speaker 2 (09:22):
After the break, we talk about the other hurdles facing
this idea and how Trump might navigate them.
Speaker 3 (09:38):
When I spend when I pay people two thousand dollars
each for low and moderate incumbentment income people, everybody but
the rich, we'll get this.
Speaker 2 (09:48):
President Donald Trump's proposal to send millions of Americans dividend
checks is part of the administration's effort to get people
feeling good about the economy again. But last time stimulus
checks w to millions of Americans, economists say they played
a role in creating the inflation we're dealing with today.
Speaker 5 (10:06):
And that's something that federal government has been wrestling with.
The federal Reserve has been wrestling with and it's not
something that they've really been able to solve, and Americans
have been facing higher prices for the last several years
at this point.
Speaker 2 (10:18):
That's White House reporter Nancy Cook again. The fear that
a new wave of two thousand dollars checks could send
prices even higher is just one of the reasons that
lots of people, from prominent economists to members of the
Trump administration and the Republican Party have been lukewarm on
the proposal.
Speaker 4 (10:35):
People are very skeptical of this idea.
Speaker 2 (10:38):
Treasury reporter Dan Flatley, and I.
Speaker 4 (10:40):
Haven't spoken to him about it, but I even detect
a little bit of hesitancy in Secretary Besson's comments on
this issue. He sort of floated the idea of Americans
saving these checks if they are issued.
Speaker 2 (10:53):
What Treasury Secretary Scott Besson was implying is that if
people put that money into savings, they're spending might not
drive inflation. Bessen has also suggested using the tariff revenue
to offset tax cuts instead of paying it out to
people directly. Meanwhile, lawmakers haven't jumped at the chance to
back this plan either.
Speaker 4 (11:12):
My colleagues who cover Capitol Hill. Have spoken to a
lot of lawmakers who are very skeptical about this, and
you really would need, according to the letter of the law,
the consent of Congress or legislation passed by Congress in
order to do this. If you're going to have this
tariff revenue coming in, most lawmakers would prefer to see
that go directly toward bringing down the deficit, paying down
the debt, and rebalancing the US's books over time, rather
(11:36):
than injecting this money into the economy in a way
that could spark additional inflation and have very unpredictable effects
in terms of how this would all play out.
Speaker 2 (11:46):
And just to be clear, Nancy, does Trump need Congress's
approval to follow through with this proposal.
Speaker 5 (11:52):
Yes, he would need congressional approval. One of his aids
this week at an event the Bloomberg government did said
that they were looking at into ways that he could
do to unilaterally, but realistically, at this point he needs
congressional approval. And Dan is right. Senate Republicans people on
the Hill are very cool to this idea. This is
not something that they're interested in doing.
Speaker 2 (12:12):
Well. I want to talk about another potential hurdle to
getting these checks out, which is the Supreme Court case
evaluating whether a large swath of Trump's tariffs are even legal.
Dan if tariffs are rolled back ruled illegal, does all
that money get clawed back too, And what would that
mean for a dividend like this.
Speaker 4 (12:31):
Yeah, we don't exactly know what the process will look
like if the Supreme Court rules against Trump's tariffs. So,
in other words, if the Supreme Court decides that Trump
misused his emergency authorities in order to put these tariffs
into place, there is a school of thought that says
the government would have to refund this money to the
(12:52):
importers who have paid these tariffs up to this point.
There's also another school of thought that says the court
could make it prospective words, the government could keep the
money as collected so far, but going forward would no
longer be able to collect the revenue from tariffs cet
or implemented using these authorities. So either way, there's going
to be a drop in the amount of revenue that
(13:13):
the government is going to be collecting. If the government
has to pay back a substantial portion of that money,
it could make things very tricky.
Speaker 5 (13:20):
The political people that I speak to in the Trump
Orbit largely believe that this is one case in which
the Supreme Court will not side with Trump, and.
Speaker 2 (13:28):
Even in opening arguments, they seem quite skeptical, exactly.
Speaker 5 (13:31):
You can hear that in the Justice's own questions about
the case, and so they're sort of working from the
idea that it will get struck down. These tariffs are
such a big part of what he firmly believes will
make the economy better, and he's always viewed tariff revenue
as a way like if he has this extra money,
then he could do different things on tax policy, and
so it will just be another big blow to his
(13:52):
economic agenda ahead of the twenty twenty six men terms.
Speaker 2 (13:56):
Is there any sort of three D chests happening here
where if two thousand dollars checks using this tariff revenue
get sent out, it would be harder to claw back
tariff revenue in the case that the Supreme Court does
not rule his way.
Speaker 4 (14:10):
I think that there is a little bit of strategizing
happening on the part of the White House when it
comes to this case. You brought up one potential justification,
but one that we hear a lot from administration officials
is that the president needs to retain these authorities and
the ability to impose tariffs for national security reasons. He
needs to be able to use it as leverage when
(14:32):
it comes to bargaining over different things with other countries.
So whether the two thousand dollars checks play into this
court case directly is sort of an open question. But
there's certainly a number of justifications that the administration has
made for why it's important for the president to have
this ability and to have flexibility and how he uses
it that others have argued that the law does not
(14:52):
give him.
Speaker 2 (14:53):
Well, how is the Federal Reserve thinking about this? Has
Jron Powell commented on this idea, It impact how the
Fed thinks about the urgency of addressing inflation. Again, if
this were to happen or seem more possible to have.
Speaker 4 (15:08):
In what the Fed is looking at at the moment
is a very mixed picture, right. So you have inflation
that has come down obviously from the high rates that
we saw a couple of years ago, but is still
stubbornly around that three percent range. You have a job
market which is slowing a little bit at a time,
and you have Federal Reserve officials who are trying to
(15:30):
decide whether or not they want to do another twenty
five basis point cut in December, notwithstanding the pressure that
Pow is getting from President Trump to lower interest rates
and lower them quickly, but also to try to figure
out how to navigate this sort of set of mixed signals,
also at a time, by the way, where data is
a little bit behind because of the government shutdown and
(15:52):
other things are happening in the economy. So it doesn't
make Pal's job any easier, and it also makes Secretary
Beston's job a little bit more difficult as he tries
to interview successors to Pal and present those to Trump.
Speaker 2 (16:05):
Trump has said he wants these checks to go out
sometime next year, and there's a lot in flux that
Powell's termus FED chair is said to end in May
of twenty twenty six, and there's this process underway to
name his successor. As you mentioned, Dan, Secretary Bessant is
deeply involved in both these efforts. So what will you
be looking out for in the economy and from the
(16:26):
White House and from the Treasury as we try to
understand whether and when these checks will actually.
Speaker 4 (16:33):
Go out voters? As Nancy has talked about were unhappy
with the state of the economy. Poles heading into the
last presidential election showed that they trusted Trump to a
certain extent, more than Vice President Harris. I think that
Trump launched on a very ambitious economic agenda, overturning years
of received wisdom about how the economy works, basically on
(16:58):
his own gut instincts. So what we're seeing now is
some feedback from that experiment, and how that plays into
the midterm elections is going to be very interesting. I
was at an event with jd Vance where he was
talking about needing more patients from voters as the Trump
administration tries to implement this wholesale economic reimagining. The problem
(17:19):
is is that people are already hurting, right, and so
I think that it's a question of how much patients
voters are really going to have with this really ambitious
remaking of the US economy. And I think there's going
to be a lot of messaging around that, and who
does that more effectively will be something that will be
determinative of the midterm elections.
Speaker 2 (17:43):
This is the Big Take from Bloomberg News. I'm Sarah Holder.
To get more from the Big Take and unlimited access
to all of bloomberg dot com. Subscribe today at bloomberg
dot com. Slash podcast offer thanks for listening, we'll be
back tomorrow, and
Speaker 5 (18:01):
You slay mind.
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Sarah Holder
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