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An idea first proposed on social media has bubbled up to the White House and received President Donald Trump’s enthusiastic endorsement: Take some of the savings from billionaire Elon Musk’s drive to cut government spending and return it to taxpayers.
“I love it,” Trump said late Wednesday on Air Force One when asked about the proposal.
If Musk’s target of $2 trillion in spending cuts is achieved by next year, supporters of the idea say that about one-fifth of those funds could be distributed to taxpaying households in checks of about $5,000.
But before you start planning for a windfall, budget experts say such huge savings — nearly one-third of the federal government’s annual spending — are highly unlikely. And sending out a round of checks — similar to the stimulus payments distributed by Trump and then President Joe Biden during the pandemic — could fuel inflation, economists warn, though White House officials dismiss that concern.
With the annual budget deficit at $1.8 trillion last year and Trump proposing extensive tax cuts, there will also be significant pressure to use all the savings to reduce that deficit, rather than pass on part of it.
Here’s what to know about the proposal:
Where is this coming from?
James Fishback, founder of investment firm Azoria Partners which he launched at Trump’s Mar-a-Lago estate in Florida, promoted the idea Tuesday on X, formerly known as Twitter, prompting Musk to respond that he would “check with the president.” Fishback said there have also been “behind the scenes” conversations about the issue with White House officials.
Musk has estimated that his Department of Government Efficiency has cut $55 billion so far — a tiny fraction of the $6.8 trillion federal budget. But DOGE’s public statements so far haven’t verified the presumed savings, and its claims that tens of millions of dead people are fraudulently receiving Social Security have been disproven.
Fishback supports having the nonpartisan Congressional Budget Office determine how much DOGE saved. If DOGE cuts $500 billion by July 2026, he said, then the checks would be $1,250, rather than $5,000.
“We uncovered enormous waste, fraud and abuse,” Fishback said in an interview with The Associated Press. “And we are going to make good and pay restitution and then rewrite the social contract between the taxpayer and the federal government.”
Fishback supports sending out checks, rather than using all the money to reduce the deficit because it would encourage Americans to seek out wasteful government spending “in their communities, and report it to DOGE.”
When am I going to get my check?
OK, let’s slow down. According to the proposal, DOGE must first complete its work, slated to be done by July 2026. Once that happens, one-fifth of any savings could be distributed later that year to the roughly 79 million households that pay income taxes. About 40% of Americans don’t pay such taxes, so they wouldn’t get a check.
How much can DOGE really save?
Color most economists and budget experts skeptical that its focus on “waste, fraud, and abuse” can actually reduce government spending by much. Budget-cutters from both parties have sought to eliminate “waste” — which doesn’t have much of a political constituency — for decades, with little success in reducing the deficit.
One of the biggest moves by the Trump administration so far has been to fire tens of thousands of government workers, but such changes aren’t likely to produce big savings.
“Only a small share of total spending goes to federal employees,” said Douglas Elmendorf, former director of the Congressional Budget Office. “The big money is in federal benefits and in federal taxes and those are not in DOGE’s purview.”
In November, John DiIulio Jr., a political scientist at the University of Pennsylvania, wrote in an essay for the Brookings Institution that “eliminating the entire federal civilian workforce would leave in place about 95% of all federal spending and the $34 trillion national debt.’’ DiIulio noted that government contractors and nonprofits that receive government funds now employ three times as many people as the federal government’s 2.2 million employees.
It’s also not clear how much in savings can be achieved without Congress codifying it in law.
“Firing someone doesn’t save money until Congress comes back and reduces the appropriation for that employee’s agency,” Emendorf said. “If you fire somebody but leave the appropriation where it is, then ... that money can be spent on something else. So DOGE can’t really achieve savings until there’s legislative change as well.”
Wouldn’t another round of government checks contribute to higher inflation?
Trump and his economists blame Biden’s $1,200 stimulus checks, distributed in the spring of 2021, for fueling the worst spike in inflation in four decades. Yet they maintain that sending checks stemming from reduced government spending wouldn’t boost inflation.
Kevin Hassett, director of the White House’s National Economic Council, said Thursday that since the money would have been spent by the government anyway, having it spent by consumers would be a wash. Biden and Trump’s stimulus checks during the pandemic were deficit-financed, which can be more inflationary.
But Ernie Tedeschi, director of economics at the Yale Budget Lab, and an economist in the Biden White House, said that more government checks are “the last thing we need economically right now.”
The U.S. unemployment rate is now much lower than in 2021, Tedeschi said, which means that businesses could struggle to hire enough workers to meet the additional demand created by a round of checks. Worker shortages can push up prices.
Yet some Democrats agree with Hassett, but for different reasons.
“I can’t imagine they’d be inflationary because I can’t imagine they’d be big enough,’’ said Elaine Kamarck, senior fellow in governance studies at the Brookings Institution.
Kamarck, who worked with Vice President Al Gore to cut government waste in the Clinton administration, dismissed the DOGE dividend as “ridiculous.”
“There’s no money there, and certainly not enough money to make a big contribution to taxpayers,” she said. “The guy just says things,” she added, referring to Musk.
The federal workforce has been hit hard over the last month, with more than 200,000 employees laid off or at risk, and another 75,000 employees accepting deferred resignation offers. The job cuts have affected a broad swath of agencies, including USAID, the Department of Veterans Affairs, the Department of Energy, and the Internal Revenue Service. As the mass terminations continue to face court challenges, impacted workers and concerned members took to LinkedIn to share their stories.
Gov. Kathy Hochul won’t immediately remove New York City Mayor Eric Adams from office, but will instead push for increased oversight of City Hall as he faces intense scrutiny over his bribery case and his relationship with the Trump administration.
Hochul announced Thursday that she has, for now, decided against using her authority to remove Adams over concerns that such a move could result in “disruption and chaos” and would ultimately be undemocratic.
“New York is facing a grave threat from Washington,” she said at a news conference in Manhattan. “The Trump administration is already trying to use the legal jeopardy facing our mayor as leverage to squeeze and punish our city.”
The decision came after she solicited opinions this week from a roster of New York political figures over questions about whether Adams could independently govern following the Justice Department’s move to drop his federal corruption case so he could help with Republican President Donald Trump’s immigration agenda.
Rather than remove Adams, Hochul said she would propose legislation to install new guardrails around City Hall to begin “reestablishing trust” with the public.
Her plan would establish a new deputy inspector general for New York City and provide additional funding for the state comptroller to probe city finances. Hochul also wants to create an explicit mechanism for the city’s comptroller, public advocate, and council speaker to launch lawsuits against the federal government.
The measures, if approved by state lawmakers, would expire at the end of 2025 when Adams’ first term finishes and be subject to future renewal, she said.
In a statement after the governor’s announcement, Adams said, “While there is no legal basis for limiting New Yorkers’ power by limiting the authority of my office, I have told the governor, as we have done in the past, that I am willing to work with her to ensure faith in our government is strong.”
Hochul — a centrist Democrat, as is Adams — has faced questions about the mayor’s future since his indictment in September on bribery and other charges. He has pleaded not guilty.
Hochul has been reluctant to oust him, arguing that doing so would be undemocratic and would thrust the city into a complex, court-like removal process that has never been used before against a sitting mayor in the city.
But after four of Adams’ top deputies quit on Monday, the governor said she had “serious questions about the long-term future of this mayoral administration.”
Asked Thursday if the mayor had done anything to restore her confidence, Hochul said she was confident that her “system of checks” would provide adequate oversight into the city’s budgetary, investigatory, and legal matters. And she repeatedly left open the door to using her removal powers in the future.
The deputies resigned after an extraordinary series of developments in Adams’ federal criminal case.
First, Justice Department leaders ordered prosecutors to drop it, saying it was impeding the mayor’s ability to help with the Trump administration’s immigration enforcement push.
Then, some prosecutors and supervisors resigned rather than follow what they saw as an improper order, and the acting top prosecutor in Manhattan said Adams’ lawyers had offered to exchange his cooperation on immigration for a dismissal of his case. The mayor and his lead lawyer said they did no such thing.
Then, after some Justice Department figures finally filed paperwork to get the case dismissed, a judge summoned Adams and everyone else involved to court Wednesday to discuss the matter. The judge hasn’t ruled yet on the government’s request to close out the case.
Adams has been set to go on trial in April on charges of taking illegal campaign contributions and getting breaks on travel in exchange for doing favors for the Turkish government.
New York mayors have both worked and tussled with state oversight, with the city having to submit its financial plans to a state-created board for review since a 1975 fiscal crisis.
But while the city has dealt with plenty of state input over the years, New York Law School professor Stephen Louis said it’s difficult to gauge the potential impact of Hochul’s proposals.
“It’s hard to say, ‘Oh, if any of these had been in place, then whatever problem is perceived wouldn’t be happening,’” said Louis, a former longtime New York City government attorney who now teaches about the legal relations between state and local governments.
“There are plenty of people who can examine what’s going on in the mayor’s office. Some people can sue the federal government. So it’s not really clear how this solves anything,” he said.
The wealth of Dr. Mehmet Oz, the celebrity heart surgeon nominated by President Donald Trump to lead the Centers for Medicare and Medicaid Services, has swelled in part from for-profit healthcare companies over which he’d wield significant power if confirmed, according to a newly filed government ethics report.
In the filing, the 64-year-old former talk show host pledged to divest from those companies within three months of confirmation and said that until then, he wouldn’t participate in any matter that could affect his investments.
Oz’s net worth is between $98 million and $332 million, according to an analysis of the disclosure, which lists asset values in ranges but does not give precise dollar figures. Oz shot to fame and made millions off his daytime talk show. His most recent disclosure shows he also holds millions of dollars worth of shares in health insurance, fertility, pharmaceutical, and vitamin companies.
Oz said in the filing that he will sell off parts of his significant and diverse investment portfolio, which ranges from retail giants such as Walmart to tech companies such as Apple.
His roster of investments includes up to $5 million in Inception Fertility, a company with a network of fertility clinics; a maximum of $100,000 with pharmaceutical giant AbbVie; and as much as $600,000 with the nation’s largest health insurer, UnitedHealth Group. He also holds up to $5 million with Nvidia, an artificial intelligence company that outfits hospitals.
His work as an adviser for iHerb, a website that sells health and beauty supplements, has earned Oz as much as $25 million in company stock, which he pledged to forfeit “as soon as practicable but not later than 90 days after confirmation.” He indicated he would also resign from his position with the company if confirmed.
His investments touch nearly every aspect of the health care system, said Lawrence Gostin, a public health professor at Georgetown University.
“He has his fingerprints and his financing all over the health care system, from services to artificial intelligence to medical products,” Gostin said. “It seems to me that those conflicts are so intertwined in his and his family's finances, I don’t know how he disentangles himself from it all.”
A spokesman for Oz did not immediately respond to a request for comment.
If confirmed by the Senate, Oz would be responsible for the programs that more than half the country relies on for health insurance: Medicaid, Medicare, and the Affordable Care Act.
Medicaid provides nearly-free health care coverage to millions of the poorest children and adults in the U.S. while Medicare gives older Americans and the disabled access to health insurance. The Affordable Care Act is the Obama-era program that offers health insurance plans to millions of Americans who do not qualify for government-assisted health insurance, but do not get insurance through their employer.
As the administrator for CMS, Oz would make decisions on how the government covers procedures, hospital stays and medications in these programs and the reimbursement rates doctors and other providers get for their services.
Oz ran a failed 2022 bid to represent Pennsylvania in the U.S. Senate as a Republican. During the campaign, he called to expand Medicare Advantage, the increasingly popular version of Medicare that’s run by private insurers who have been accused of defrauding the government by billions of dollars through the program.
Before his turn to politics, Oz was a renowned heart surgeon at Columbia University. He rose to fame on “The Oprah Winfrey Show” with appearances where he discussed weight-loss diets, Botox, and anti-aging techniques. Eventually, he landed his own show, which was popular but attracted deep criticism from the scientific community. Some colleagues at Columbia University called for his removal over claims he made about products on TV. Senators, too, scolded him during a 2014 hearing over the weight-loss drugs he promoted
He has formed a kinship, though, with Robert F. Kennedy Jr., who was sworn in as the nation’s top health official last week. Kennedy and Oz have shared concerns over pesticides and unhealthy foods.
Oz’s confirmation hearing to become CMS administrator has not been scheduled.
WAITING FOR DISMISSAL EMAIL
The Agriculture Department is scrambling to rehire several workers who were involved in the government’s response to the ongoing bird flu outbreak that has devastated egg and poultry farms over the past three years.
The workers were among the thousands of federal employees eliminated on the recommendations of billionaire Elon Musk‘s Department of Government Efficiency, which is working to carry out Trump’s promise to streamline and reshape the federal government.
Republican Rep. Don Bacon said the administration should be more careful in how it carries out the cuts.
“While President Trump is fulfilling his promise to shed light on waste, fraud, and abuse in government, DOGE needs to measure twice and cut once. Downsizing decisions must be narrowly tailored to preserve critical missions,” said Bacon, who represents a swing district in Nebraska.
The bird flu outbreak has prompted the slaughter of roughly 160 million birds to help control the virus since the outbreak began in 2022. Most of the birds killed were egg-laying chickens, so that has driven egg prices up to a record high of $4.95 per dozen on average. The federal government has spent nearly $2 billion on the response, including nearly $1.2 billion in payments to farmers to compensate them for their lost birds.
A USDA spokesperson said the department “continues to prioritize the response to highly pathogenic avian influenza (HPAI)” and several key jobs like veterinarians, animal health technicians, and other emergency response personnel involved in the effort were protected from the cuts. However some employees of the USDA’s Animal and Plant Health Inspection Service were eliminated.
“Although several APHIS positions supporting HPAI were notified of their terminations over the weekend, we are working to swiftly rectify the situation and rescind those letters,” the department spokesperson said.
Politico and NBC News reported that the jobs that were eliminated were part of an office that helps oversee the national network of labs USDA relies on to confirm cases of bird flu and other animal diseases. It wasn’t immediately clear how many workers the department might be trying to rehire and whether any of them worked at the main USDA lab in Ames, Iowa.
“At a time when producers are already grappling with the bird flu, the public is facing high prices, and all Americans are on edge about what broader spread of this virus could mean, the last thing the administration should have done was to eliminate these positions,” Democratic Sen. Amy Klobuchar said. “USDA must rehire these crucial personnel immediately.”
Trump administration officials said this week that the USDA might change its approach to the bird flu outbreak so that maybe entire flocks wouldn’t have to be slaughtered when the disease is found, but they have yet to offer many details of their plan.