President Donald Trump said Wednesday his administration is beginning to ship checks within the quantity of $1,776 to practically 1.5 million US service members, utilizing cash from the “billions of dollars” he says the federal government has collected by way of his tariffs.
“Because of tariffs, along with the just-passed One Big, Beautiful Bill, tonight I am also proud to announce that more than … 1,450,000 military service members will receive a special, we call ‘Warrior Dividend,’ before Christmas,” Trump said Wednesday night time in a televised address to the nation.
But he alone can’t resolve how the income from his sweeping tariffs will get spent.
All income the federal government collects, whether or not by way of unusual taxes or tariffs, goes right into a common fund managed by the Treasury division that’s then used to pay the federal government’s bills, similar to distributing tax refunds. Any different use of the cash has to be permitted by Congress, which, to this point, hasn’t occurred for tariff collections.
“Money is fungible,” a White House spokesperson informed NCS. “Just because Congress didn’t specifically appropriate tariff revenue to be used for the Warrior Dividend doesn’t change the fact that the government has more money available (because of tariffs) to pay for these sort of initiatives.” Congress did, nevertheless, log off on Trump’s One Big Beautiful Bill Act, which earmarked cash for the checks.
Regardless, not solely is not one of the $260 billion in tariff income being put towards that, however it’s unlikely to be utilized to something (and positively not everything) that Trump has promised.
First off, about half of the tariff income collected this 12 months, or as a lot as $129 billion, is tied to a landmark tariff case the Supreme Court is anticipated to quickly situation a ruling on. If the justices rule in opposition to Trump, the federal government could have to situation billions of {dollars} in refunds to importers.
But, refunds however, right here’s everything else Trump, at numerous factors, has promised that tariff income collected throughout his second time period could be used for:
Handing out $2,000 refund checks
Last month, Trump posted on Truth Social: “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.” Trump hasn’t specified what that earnings cap could be.
While discussing refund checks, Trump has typically introduced up utilizing tariff funds to assist pay down the nation’s virtually $40 trillion in federal debt. He has not specified how a lot he’d search to pay down, however has said he’d “substantially” cut back the debt.
But even when Trump used each cent of the tariff income collected throughout his second time period, it could solely have the option to pay off lower than 1% of the nationwide debt.
During a campaign event last year, Trump appeared to recommend that tariff income could possibly be put towards making child care extra reasonably priced.
“With child care … those numbers are small, relative to the kind of economic numbers that I’m talking about, including growth, but growth also headed up by what the plan is that I just told you about,” Trump said at an occasion hosted by the Economic Club of New York. The president spoke extensively about his tariff plans all through the occasion.
Trump has said that any loss of government revenue that’s related to lots of the tax cuts his administration has both floated or enacted, together with new limitations on the portion of tips subject to taxes, will be made up for with tariff income.
At a Cabinet assembly this month, for occasion, Trump said: “I believe that at some point in the not‑too‑distant future, you won’t even have income tax to pay because the money we’re taking in is so great.”
Trump pledged to distribute “some of that tariff money” to farmers, lots of whom have been hurt by tit-for-tat strikes that international locations, particularly China, have taken in retaliation of upper tariffs on commodities.