Trump’s proposed $5,000 dividend blindsides Congress, angers fiscal conservatives: ‘A dangerous arms race’

DALLAS — Conservative fiscal hawks greeted President Trump’s proposed $5,000 payout to Americans if Republicans hold the House and Senate in November with a frosty reception, even as some were reluctant to say so publicly.

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During his barn-busting speech at the GOP midterm convention, Trump claimed that America’s “tremendous economic success” made the proposal possible for roughly 245 million US citizen adults, which could cost more than $1.2 trillion.

Senate Majority Leader John Thune (R-SD) indicated that congressional leaders didn’t get a heads-up, telling The Post that he “heard about it, as you did last night.”

“The difference between the president and our team, Republican majorities in the House and the Senate, and Democrats who are going to grow government and have government spend money on the American people versus a philosophy that allows the American people to make those decisions for themselves,” he said.

Ironically, Trump’s proposal came after he spent much of his speech bashing Democrats as “communists” and warning they would wreak havoc on the economy.

“We are in a dangerous arms race where Republicans and Democrats compete to run up budget deficits by bribing voters with spending hikes and tax cuts that the country can’t afford,” Jessica Riedl, a budget and tax fellow at the Brookings Institution, vented to The Post.

“The only way to stop the deficit arms race is for the bond market to essentially cut off the federal government’s borrowing ability, and that may be already starting right now with rising interest rates,” Riedl added.

“It never ends well for an economy.”

Riedl, who blasted the proposal as “irrational and dangerous,” further contended that “any claim Republicans have on being deficit hawks is collapsing.”

The US has some $40 trillion in debt, resulting in interest payments that are higher than military spending.

Bond market yields for governments all over the world have been rocked by unrest and surging yields. The 10-year Treasury yield has jumped to multiyear highs, prompting the Trump administration to intervene.

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“Or maybe some of us think dependency is evil & soul-sucking in all its forms,” outgoing Rep. Chip Roy (R-Texas) posted on X in response to a post about criticisms of the $5,000 proposal.

Palantir co-founder and GOP donor Joe Lonsdale was more direct.

“I am hugely in favor of winning the midterms, and love much about this admin, but am strongly against bread and circus bribes,” he wrote.

Trump previously floated dividends from the Department of Government Efficiency’s (DOGE) savings and from tariff revenue.

When asked about why he can’t send out the checks now, Trump told Fox News’ Laura Ingraham, “Because the Democrats can’t do it, because with them, it’s negative growth. With us, it’s so positive,” according to a preview clip.

Due to the Supreme Court’s ruling torpedoing Trump’s International Emergency Economic Powers Act (IEEPA) tariffs, the administration has been forced to return the revenue from those duties. Trump has moved to use other tariff power to keep up his protectionist agenda.

Still, Vice President JD Vance contended that tariff money could still pay for the dividend proposal. Uncle Sam brought in just under $300 billion for fiscal year 2026 as of July 27, according to the latest data from US Customs and Border Protection.

“What the president’s just saying is, if you keep it going, to the American people, if you keep us in power and allow us to continue to do these things, then you’re going to share in some of the benefit of this incredible wealth that we’re creating in the United States of America,” Vance told Fox News’ “Hannity.”

“I don’t think it’s a controversial idea. It’s actually the President of the United States saying, we’re all working together. We’re all on the same team. And if we continue to create wealth, that wealth is going to go back to the American people.”

Trump indicated that the dividend would have a restriction requiring adults to spend on American goods and services.

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