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Trump's $5,000 Check Idea Could Come With a Hidden, Significant Cost

Trump's promised $5,000 election dividend checks might harm, not help.

By Paige Cerulli , Edited by Andrea Basse

Updated Sept. 24, 2026

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President Trump's promise of a $5,000 election dividend check might put extra cash in your pocket, but economists are warning that it could also potentially hurt Americans, and retirees in particular. During the September Republican midterm convention, Trump promised every American adult would receive a dividend check if Republicans keep control of Congress during the midterm elections.

The prospect of $5,000 in extra cash may be highly appealing as Americans face rapidly rising fuel costs, high grocery prices, and climbing housing expenses, but if Trump should follow through on the promise of those dividend checks, retirees might discover a hidden downside. Here's why.

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The details on the proposed dividend checks

Polls have indicated that the Republicans may face a rough road in the midterms, and if they lose the majorities they currently hold in the House and Senate, the presidency might face increasing challenges in passing legislation. Trump floated the promise of dividend checks in an apparent effort at boosting excitement and support for Republicans ahead of the midterms.

"Because of our tremendous strength and success economically, I will issue a dividend to every adult citizen in the United States of America for $5,000," he said. "We'll call it the Trump Dividend. Congratulations. Now all we have to do is win."

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The potential cost of the dividend checks

Dividend checks could come at a substantial cost. According to 2024 Census data, there are approximately 245.3 million adult citizens, meaning issuing every adult a $5,000 dividend check could exceed $1.2 trillion in costs.

Vice-President JD Vance told Fox that tariff revenues would help cover the cost of the dividend checks. "What the president is 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 gonna share in some of the benefit of this incredible wealth that we're creating," Vance said.

Are the dividend checks likely to be issued

Even if Republicans maintain hold of the House and Senate through the midterms, it's possible that the dividend checks may not be issued. Congress needs to pass legislation approving the issuance of the checks, and it's possible that the courts may prevent the effort because of its apparent political motivation.

This isn't the first time that Trump has backed checks that never materialized. He previously supported a $5,000 DOGE dividend check and a $2,000 tariff rebate for U.S. citizens, but neither payment was ever issued.

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How dividend checks might impact inflation

If dividend checks were issued, they might make inflation even worse, warn economists. Heather Long, chief economist at the Navy Federal Credit Union, calls the dividend checks a "short-term gain followed by a lot of long-term pain," noting that the checks could exacerbate inflation, causing borrowing prices for homes, cars, credit cards, and businesses to climb even higher.

At a total cost exceeding $1.2 trillion, the election dividend checks could cost the country much more than the Covid-era stimulus checks, which totaled $931 billion. Those Covid checks were blamed for making inflation worse, suggesting the effects of the dividend checks might be even more significant.

Issuing dividend checks might increase the national deficit, and the inflation rate is already above the Fed's 2% target. The checks might further weaken the U.S. economy, ultimately having widespread negative impacts that exceed any benefits the checks provide.

How dividend checks might impact retirees

Retirees might particularly feel the impacts of these checks. Initially, the extra money might help retirees on a fixed income to better cover some of their increased costs, like healthcare expenses and grocery costs. But if the checks exacerbate inflation, retirees may face even higher costs over time. Inflation may erode buying power, and a one-time payment likely isn't enough to offset that effect.

How dividend checks might impact Social Security

The timing of the checks might be extra harmful. The cost-of-living adjustment (COLA), which helps Social Security benefits keep up with inflation, is calculated based on third-quarter inflation data from each year. Only inflation data from July, August, and September is considered, and the COLA then goes into effect in January of the following year.

If these checks are issued after the November midterms, the COLA that goes into effect in 2027 may have already been calculated. The checks might increase inflation in 2027, but retirees wouldn't receive a boost in their Social Security benefits to reflect that inflation until 2028, leaving them to cover the extra costs on their own.

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Bottom line

The dividend checks aren't law and may never materialize, so don't build your budget around money that you haven't received. Instead, watch this issue and see if Congress takes any action after the election.

In the meantime, consider revisiting your budget and identifying any areas where you might be able to cut costs, whether that's by comparison shopping before going to the grocery store or signing up for online subscriptions to save money on items you frequently purchase. Finding ways to stretch your retirement dollars further may give you peace of mind even as inflation continues to be an issue.

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