(Yahoo! Finance) - President Donald Trump is embracing an idea for a "DOGE dividend," in which Americans could get a tax refund next year thanks to the savings Elon Musk and his team are unearthing.
The prospect of giving 20% of DOGE's savings to American taxpayers is the latest example of how the Trump administration continues to shift the goals of Musk’s cost-cutting group and add new aspects to its ever-expanding mission.
Just this week, Musk added another new element to DOGE’s docket by saying in a Fox News interview that — in addition to "the overall goal" of deficit reduction — "one of the biggest functions of the DOGE team is just making sure that the presidential executive orders are actually carried out."
The challenge is that DOGE faces a steep climb to make its math match its promises on the dividend idea alone.
New data released just this week by Musk’s group shows how daunting the US government's $2 trillion annual deficit is and how far away DOGE is from generating a dividend of more than a few dollars for each taxpayer.
Trump said Wednesday a DOGE dividend is possible because "the numbers are incredible ... so many billions, hundreds of billions” and that the refunds "could be a lot."
But the numbers don't support him, at least not yet.
The DOGE team has begun to put its work online and is claiming $55 billion in savings so far thanks to an array of actions from fraud detection to contract renegotiations to workforce reductions.
The group has only provided a detailed accounting for the savings from contracts and real estate actions. Those add up to less than $9 billion in savings.
Other analyses have put the confirmed savings even lower, with NPR pegging the figure at closer to $2 billion.
“Providing stimulus checks to American voters is a trillion dollar plus proposition so that math does not add up,” added Veda Partners Managing Partner and Director of Economic Policy Henrietta Treyz in a Yahoo Finance Live appearance on Thursday morning.
She added another hurdle Trump and Musk aren’t talking about, noting “they’d have to get something through Congress.”
And DOGE has also clashed with online sleuths who have surfaced errors in the group's data, like savings that were initially counted three times — something the group then corrected without changing the top-line number.
Jessica Riedl, a senior fellow at the conservative Manhattan Institute, calculated the real confirmed savings so far are closer to $4 billion, which she notes translates into a dividend of $2.42 per person.
For Trump, ‘I love it’
On the 2024 campaign trail, Musk promised that DOGE’s ultimate savings would be "at least" $2 trillion, but then soon backed away — saying more recently he has a "good shot" at cutting about half of that.
He has settled on $1 trillion as a goal, repeating this week that "the overall goal is to try to get $1 trillion out of the deficit."
To do that, Musk will need to increase the pace even as so many questions linger about his initial claims.
While $55 billion in one month would be a significant savings for taxpayers, it would also represent less than 1% of the annual federal budget.
Musk's work may also get more challenging from here as the group moves to parts of the government like Social Security and Medicare that Trump has repeatedly promised not to cut.
All told, this week's data release offered evidence that Musk's team is in the books of about a tenth of the federal government’s agencies so far.
"Sure, if DOGE eliminates the entire budget deficit, we can talk," Riedl added in a post this week but said to get there, DOGE would need to "eviscerate much of Social Security, Medicare, Medicaid, defense, and veterans."
"At that point, a dividend check may be the last of voter concerns," she added.
The dividend proposal was first floated by James Fishback, the CEO of investment firm Azoria, who laid out a plan where the government would put aside 20% of DOGE’s savings to give the money directly to Americans next year.
He calculated, based on Musk's now-discarded goal of $2 trillion in savings, that the dividend could take the form of a $5,000 tax refund next year.
Musk immediately embraced the idea by responding to Fishback’s idea with a social media post saying he "will check with the President" and then touting the president’s embrace of the idea on Thursday morning.
"I love it," Trump added to reporters of the idea aboard Air Force One on Wednesday night.
"It could also give the taxpayer incentive to go out and report things," the president added.
What Trump and Musk also overlook is that much of the planned DOGE savings may also go to funding new tax cuts, with House Republicans recently putting aside $4.5 trillion for a tax bill to be negotiated in the coming weeks or months.
Trump and his allies also say massive savings and new government revenues are in the offing via other initiatives, such as regulation cuts, expanded oil drilling, and his tariff plans.
Trump even posted Thursday morning: "BALANCE BUDGET NOW??? LETS GIVE IT A SHOT. LOTS OF MONEY COMING IN FROM TARIFFS."
Trump has only actually implemented one of his tariff promises far — 10% duties on China — and tariffs make up less than 2% of federal revenues.
By Ben Werschkul - Washington Correspondent
