White House officials claim that” Expand income” checks won’t lead to inflation because the income would otherwise have been used by the government.
During the evening media briefing, National Economic Council Director Kevin Hassett said,” If we don’t spend federal money and we give it back to people, therefore if they spend it all, you’re even.” ” But they’re probably going to save a lot of it, in which case you’re reducing prices”.
Washington has been buzzing ever since the Trump administration’s initial discussion of the alleged DOGE payout began earlier this year. Although there are still many questions about the plan, the plan is to return 20 % of any funding cuts the quasi-government company makes to the public this summer.
Given that the checks in the style of the stimulus invoke thoughts of the primary payment made during the pandemic, one might wonder if such a move may lead to inflation. That spending took much of the blame for inflation, which peaked at 9.1 % in 2022.
That will not be the event, according to President Donald Trump and his team.
” When the government spends a bunch, that’s what creates cpi”, Hassett added. ” We learned that from]former President ] Joe Biden. But if we reduce federal spending, then that reduces prices, and if you give folks income, then they’re going to keep a bunch of it. And when they save it, that also reduces desire and reduces prices”.
Collins: On these possible checks you might give out, are you concerned that they could be contractionary?
Hassett: Completely not. Think if we don’t spend any money on state projects and instead give it back to the people. If they spend it all, you are also. They’re definitely going to save it … photograph. twitter.com/jJyYvGCrbx
— Acyn ( @Acyn ) February 20, 2025
Trump himself suggested on Wednesday that another 20 % of the saved funds would go toward lowering the country’s debt, while White House policy adviser Stephen Miller said the remaining 60 % could be forwarded to the budget for the following year, representing real savings, compared to the original 20 %.
Trump claims that the federal government does “take over” DC.
Elon Musk, the head of the Department of Government Performance, has set a budget-cutting target of$ 2 trillion, which most finances experts find unattainable. If that number were to be reached, then reportedly$ 5, 000 checks may be distributed to the about 79 million national income taxpaying households.
The checks doesn’t go away until at least July 2026, when DOGE wraps up its vision, and they may also involve Congressional approval.
