By Toluse Olorunnipa
Sunday, December 28, 2025
President Donald Trump can hardly conceal his disgust for
the word affordability, referring to its ascendance in America’s
political lexicon as a “hoax,” a “con job,” and a “fake narrative” perpetuated
by Democrats. But there’s one sign that he’s treating it like a very real
political vulnerability: The former reality-television host is trying to give
people cash.
In recent weeks, Trump has been pitching half a dozen
schemes to, in the words of White House officials, put money “straight into the
pockets of the American people.” After a year in which Americans’ pocketbooks
have been walloped by Trump’s tariffs, cuts to the social safety net, and
apparent nonchalance in the face of spiking
health-care costs, the president is turning to the allure of
sweepstakes-style checks from the government to help coax voters out of their
financial malaise ahead of next year’s midterm elections. It likely won’t work,
economists from across the political spectrum told me; one likened the payments
to a bandage over a bullet wound.
Trump has floated a payment of $2,000 to most Americans
in the form of a so-called tariff dividend, to be paid out from fees levied on
foreign goods. He has offered $12 billion in relief to farmers reeling from the
trade war he started. He has suggested paying subsidies “directly to the
people” to pay for health insurance. And as my colleagues Ashley Parker and
Nancy Youssef reported, Trump used a prime-time national address on December 17
to announce onetime
bonus checks for troops in the amount of $1,776. “The checks are already on
the way,” Trump said of the payments to 1.4 million service members. (The
Pentagon says the money, which is being taken from a fund to improve housing
for troops, landed in bank accounts before Christmas.)
Although the proposals each have different designs and
purposes, taken together, they represent a
concerted effort to neutralize the cost-of-living concerns dominating
voters’ minds. Those worries are likely to only increase as Americans contend
with rising health-care costs and growing signs of unease in the labor market,
Mark Zandi, the chief economist at Moody’s Analytics, told me. Trump’s proposed
payments are ill-suited to deal with those macroeconomic trend lines, he said.
“It’s not a solution to anybody’s problem,” he said. “It doesn’t address
inflation; it doesn’t address the weak labor market. It doesn’t address the
fact that many Americans don’t have any assets and owe a lot on their credit
cards.”
As the president’s first year in office comes to a close,
the economy is showing signs of significant strain. A delayed jobs report
earlier this month showed that the country’s unemployment rate ticked up to 4.6
percent in November, the highest since 2021. Young people and Black Americans
are facing especially
high rates of unemployment, which some economists see as a warning sign for
the broader economy. Federal Reserve Chair Jerome Powell warned recently of “a
labor market that seems to have significant downside risks.” Consumer sentiment
has neared
record lows in recent months, a somberness that Trump appeared determined
to counteract during his rambling speech on December 17, in which he blamed
high prices and low wages on former President Joe Biden and shouted a
series of misleading statistics about how the economy is great.
Michael Strain, the director of economic-policy studies
at the American Enterprise Institute, told me that the president’s attempts to
convince Americans that their financial circumstances are better than they
think sound “eerily similar” to the strategy that Biden embraced amid
widespread concerns over the cost of living. Trump’s desire to entice voters
with onetime payments is unlikely to improve his standing, Strain said. “People
don’t like higher prices, and they don’t like higher prices even if their incomes
are going up faster than prices,” he said. “And my guess is that people’s
dislike of higher prices will not be mitigated by a onetime gift from Uncle
Sam.”
The White House did not respond to questions about the
president’s plans for any further cash handouts, but a spokesperson disputed
the idea that the payouts Trump has proposed so far were part of a broader
political strategy to address affordability.
Although Trump has repeatedly described America as “the
hottest country anywhere in the world” and declared that a “golden era” of
prosperity has dawned, his rosy view is not widely shared by the public. An NPR/PBS
News/Marist poll released earlier this month found that only 36 percent of
Americans approved of Trump’s handling of the economy, the lowest number the
president has received on that question during his two terms (57 percent of
Americans disapprove). With the midterms less than a year away, voters appear
to give Democrats a slight edge over Republicans on the question of whom they
trust more to handle the economy. Seventy percent of respondents said the cost
of living where they reside is not very affordable or not affordable at all.
It’s little wonder, then, that Trump is repeatedly
talking about brighter days ahead and promising Americans cash infusions that
he says will allow them to benefit from what he has described as a deluge of
dollars flowing into the country from abroad. “We’ve taken in hundreds of
billions of dollars in tariff money,” Trump told reporters last month,
promising that the $2,000 in “dividends” would be delivered to voters in
mid-2026. There are some potential issues. The proposal would probably cost
more than the roughly $200 billion that America has collected in tariffs over
the past year, and Trump would presumably need congressional approval for the
preelection payouts. The president has already made a habit of using the tariff
money—much of it paid by American companies and consumers—as a personal reserve
fund he can direct as he sees fit. Trump has said the $12 billion his
administration is offering to struggling farmers is being sourced from the
tariff funds. During the government shutdown in October, the president covered
a lapse in funding for a nutrition program supporting women and children by
unilaterally tapping tariff revenue. In announcing the $1,776 payment to
troops—which he referred to as “a warrior dividend”—Trump said twice that the
$2.5 billion program was made possible, in part, “because of tariffs,” though
the Pentagon has clarified that the money actually comes from the
military-housing stipend, which Congress has already approved.
Several Republicans oppose Trump’s tariffs—and some are
privately hoping the Supreme Court will rule them unconstitutional next year.
Trump proposed the $2,000 payments shortly after Supreme
Court justices expressed skepticism of his power to levy broad tariffs
unilaterally.
The White House has not yet provided details on Trump’s
plan for the tariff dividend, though Treasury Secretary Scott Bessent
previously said that such a plan would indeed require legislation from
Congress. The proposal has faced a cool reception on Capitol Hill, where
Republicans have said that any revenue from tariffs should go toward paying
down the nation’s $38 trillion in debt. Trump-administration officials have
sought to draw more attention to the tax bill Congress passed over the summer,
reminding voters that some of its financial benefits are expected to kick in
next year. Speaking at the Treasury Department earlier this month, Bessent
touted a program that will offer babies born from 2025 to 2028 an investment
fund seeded with a $1,000 grant from the government. Although the money in the
accounts cannot be withdrawn until the year a child turns 18, the president’s
allies have tried to brand the program as another instance of Trump putting
money directly into Americans’ pockets.
The IRS recently revealed the process for establishing
the “Trump Accounts,” launching a new website
and tax form for parents to claim the money and contribute their own funds
beginning in July. “Trump accounts are the president’s gift to the American
people,” Bessent said at the Treasury, calling IRS Form 4547, which is named
after Trump’s two presidential terms, “the most aptly named tax document of all
time.” Administration officials are also trying to pitch the tax law as a more
immediate boon to voters struggling with the rising price of groceries,
housing, child care, and other expenses. “Next spring is projected to be the
largest tax-refund season of all time,” Trump said during his prime-time
address.
Provisions of the tax law signed in July were made
retroactive to 2025, meaning the sliver of Americans who will benefit from
reduced taxes on tipped wages, overtime, and Social Security payments will
likely see larger tax refunds when they file in the new year. White House Press
Secretary Karoline Leavitt told reporters on December 11 that Americans could
expect an average of about $1,000 in additional tax refunds next year. But
unlike Trump’s 2017 tax cuts, which included a broad reduction of existing rates
across income brackets, the 2025 bill was primarily designed to keep those tax
cuts from expiring—meaning that many Americans will not notice as big of a
difference in their take-home pay as they did eight years ago. And the wave
of company-sponsored employee bonuses that Trump celebrated in 2017, after
his original law significantly reduced the corporate tax rate, have not
recurred.
Other provisions of the 2025 bill, including a larger
deduction for state and local taxes and a new write-off for people who buy
American-made vehicles, affect only a relatively small portion of the public,
including wealthy people in high-tax states and those financially secure enough
to purchase a brand-new car (at an average
price now upwards of $50,000). The legislation’s curbs on spending for
social programs, by contrast, could be felt broadly among the poorest
Americans. Medicaid recipients and food-stamp beneficiaries will face some of
the steepest cuts. The bill also did not address the looming expiration of
Affordable Care Act subsidies, which is set to increase premiums for some 22
million Americans next month.
Facing angst from voters and some members of Congress
over the fact that the new year will cause health-care costs to double for
millions of voters, Trump is again offering cash as a salve. “I want the money
to go directly to the people so you can buy your own health care; you’ll get
much better health care at a much lower price,” he said in his prime-time
address, resurfacing a loose proposal to turn the expiring subsidies into new
government-funded health-savings accounts. But the president has not provided
much detail about how the proposal would work and has not done much to push
Congress to pass a new law before premiums spike. Earlier this month, four
moderate Republicans vented their frustration by joining Democrats to back a
discharge petition extending the current subsidies for three years. The
legislation has a strong chance of passing the House in January, but faces long
odds in the Senate, where Republicans have already voted down a similar
proposal.
The situation has frustrated voters like Stacy Rye, a
56-year-old real-estate agent in Missoula, Montana, who is staring at a massive
increase in premiums next year. Rye told me that on top of the spiking costs
for coffee, beef, and other groceries she already deals with, she will have to
pay an extra $6,700 next year for health-care premiums. The plan by some
Republican lawmakers to offer Americans up to $1,500 for health-savings
accounts did not seem like it would help much, she said.
“What am I supposed to do with $1,500 when my premium is
$1,300 a month?” she said, adding that Trump’s plan to have consumers haggle
with insurance companies and hospitals seemed unworkable. “These are unserious
people. I can’t negotiate against a giant company about what my health premiums
are going to be.”
The president’s penchant for direct government payments
goes back to 2020, when Congress responded to the coronavirus pandemic by
passing several pieces of legislation that offered cash to struggling
Americans. Trump put his name on the checks—the first of which offered $1,200
per adult—and sent letters to voters reminding them of his role in approving
the “Economic Impact Payments.”
But economists later concluded that the flood of money
injected into the economy during the pandemic—an approach Biden continued after
taking office in 2021—helped worsen the soaring inflation that ultimately eased
Trump’s return to the White House.
Now the president is facing the reality that many of his
promises to quickly turn the economy around have fallen flat with a growing
number of voters. And his well-worn tactic of pitching cash payments to voters
at a time of deep uncertainty about the fundamentals of the economy may not be
enough to reverse their disillusionment.
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