The White House’s chief economist stated that distributing dividends checks from the Department of Government Efficiency (DOGE) to Americans would “absolutely not” lead to inflation.
National Economic Council Director Kevin Hassett stated on Thursday (February 20) that he is not concerned about this leading to inflation.
President Trump publicly announced on Wednesday (February 19) that he is considering a plan to return 20% of the money saved from the Department of Government Efficiency back to Americans, while using a portion of the money to pay off debt.
If realized, this would be similar to the stimulus checks millions of Americans received during the COVID-19 pandemic.
During a White House press briefing on Thursday, when asked if “DOGE dividends” could potentially cause inflation, Hassett stated that it “absolutely would not.”
“When the government spends a lot, it leads to inflation. We’ve learned this from the Biden administration,” Hassett responded.
“If you give people money, they will save it, and when they save money, it also reduces demand and lowers inflation,” he added.
Multiple factors have led to recent inflation in the United States – including supply chain disruptions, demand changes due to the pandemic, and Russia’s 2022 invasion of Ukraine – but some economists attribute economic overheating to the government’s massive spending, including stimulus checks.
Hassett was also asked about President Trump’s proposal to consider replacing income tax with tariff revenue. He answered that eliminating income tax and replacing it with tariff revenue has “always been the president’s plan.”
“Of course, tariff revenue will make it easier for the Republican Party to pass that bill, as it has always been our plan,” he said.
He explained that, for example, the recent 10% tariff levied on China, along with revenue from eliminating minor tariff exemptions, is estimated to be between 500 billion to 1 trillion dollars.
However, House Republican Mike Johnson, responsible for government budget allocations, poured cold water on the DOGE dividends.
Speaking at the Conservative Political Action Conference (CPAC) on Thursday, he said that politically, sending each person a check is a good idea, but the United States needs to address its massive deficit and prioritize paying off government debt.
According to data from the DOGE Live Tracker, the amount already cut is approximately 550 billion dollars. However, it is currently unclear where these cuts specifically come from. ABC News reported that DOGE released a list of canceled federal contracts on its website, but these contracts only saved about 86 billion dollars.