What to know about Trump’s US$5,000 ‘dividend’ pledge

WASHINGTON, United States (AFP)—President Donald Trump has promised $5,000 to every American adult if Republicans retain control of the House of Representatives and the Senate in November's midterm elections. The pledge has raised questions about its legality, its cost and where the money would come from. - Federal law prohibits offering payments in exchange for votes and separately restricts promises of federally funded benefits in return for political support.

Trump's offer would appear to skirt these prohibitions because it is more in the nature of a campaign promise and would apply to all adult Americans regardless of how they voted. Any such payment would in any case require congressional authorisation, as the US Constitution bars the president from spending Treasury funds without an appropriation made by law. But Trump told CBS News Texas he did not think Congress would need to approve the payments, without going into details.

Trump has made similar pledges in the past which never came about, including promising Americans $2,000 checks from tariff revenues and $5,000 checks from savings made from drastic federal job cuts. - There are about 276.8 million adults aged 18 and over in the United States, according to Congressional Budget Office data, and doling out $5,000 to each would come to $1.384 trillion. Trump said he was targeting "every American." Restricting the payments to US citizens would reduce that figure to about $1.27 trillion.

During the Covid pandemic, Congress approved payouts to income-eligible tax filers and their dependents only, a narrower approach that would lower the cost further. The three rounds of pandemic stimulus checks approved in 2020 and 2021 came to about $814 billion in total, according to federal oversight data. - Would the checks make inflation worse?

This is a serious problem for Trump as he faces voter anger over costs of living. Direct cash handouts of this kind are sometimes described by economists as "helicopter money" -- a term for no-strings-attached payouts from a central bank, meant to jolt an economy out of deflation, the opposite of the price pressures the United States faces now. US consumer inflation is running at 3.4 percent, well above the central bank's two percent long-term target.

Injecting roughly $1.27 trillion into consumer hands would stir…