MacGuineas, Rogoff warn $1.2 trillion plan could deepen debt and inflation
President Donald Trump pledged $5,000 to every American adult if Republicans retain control of the House and Senate in November’s midterm elections, making the promise during his address at the Republican midterm convention. The Guardian published an opinion column by Steven Greenhouse on Tuesday critiquing the proposal.
According to Greenhouse’s column, the payment would reach an estimated 240 million US adults, putting the cost at approximately $1.2 trillion — “more than the Pentagon’s budget and nearly what the US will spend on Medicare this year.”
The pledge drew criticism from fiscal analysts and from members of Trump’s own party. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, characterized the plan as irresponsible and warned that it would deepen the deficit, drive up inflation, and push borrowing costs higher throughout the economy. MacGuineas added that “debt is now as large as our entire economy, deficits are running $2tn per year, inflation is about 3.5%, and the 10-year Treasury yield is approaching 5%.”
Kenneth Rogoff, a Harvard economics professor and former chief economist of the International Monetary Fund, told PBS the US was “already running an unsustainable deficit” and that Trump’s proposal would “only blow [it] up even more and increase the already high odds of a debt crisis over next five years.”
Several prominent Republicans publicly rejected the plan. Joe Lonsdale, a tech billionaire and Republican donor, said he was “strongly against bread and circus bribes.” Representative Bob Good of Virginia, former chair of the House Freedom Caucus, called Trump’s promise a “socialist vote-buying scheme.” Former Representative Marjorie Taylor Greene of Georgia, once a Trump ally, wrote on X: “$5,000 for the peasants will be in the mail after the election only if you vote Republican, along with those DOGE and tariff money checks.”
Administration officials defended the funding mechanism. Vice President JD Vance said much of the money would come from tariff revenues. Commerce Secretary Howard Lutnick offered a different account, telling reporters that funding would come from charging wealthy foreigners for visas and from the administration’s investments in Intel and other companies.
Trump called the payments a “Trump dividend,” saying the money was available “because of our tremendous strength and success economically.” Greenhouse disputed that characterization, writing that “there really hasn’t been economic success during Trump’s second term, other than the much-detested datacenter boom and the stock market hitting repeated records.” Greenhouse cited higher inflation than when Joe Biden left office, slower GDP growth, a trade deficit that has risen more than 60% since April, 35,000 factory jobs lost since Trump’s inauguration, and average monthly job growth less than one-third of Biden’s final two years in office.
The 10-year Treasury yield stood at 4.97% on Tuesday, according to Federal Reserve Economic Data — near the level MacGuineas cited in her warning.
Greenhouse’s column also noted that Trump had previously promised tariff revenue would deliver a “$2,000 dividend” to most Americans and that Elon Musk’s Department of Government Efficiency would yield direct savings, neither of which materialized, according to Greenhouse. Greene’s X post referenced both unfulfilled pledges.
If enacted, the $5,000 payments would likely increase consumer demand and push inflation higher — at odds with Trump’s stated goal of cutting prices, according to the column.
Steven Greenhouse is a journalist and former labor and workplace correspondent who has covered economic policy. His full column is published in The Guardian.