Economic Progress Makes Stimulus More Realistic

Kevin Hassett, Director of the National Economic Council and one of Trump's nominees for Federal Reserve Chair, is feeling more optimistic about the feasibility of $2,000 stimulus checks. During a Sunday appearance on "Face the Nation with Margaret Brennan," Hassett explained that President Donald Trump might present the proposal to Congress in the new year, though it's ultimately up to lawmakers to decide.

The key shift? Economic conditions have improved significantly since summer. Hassett admitted he "wasn't so sure" back in July whether there was room for such payments, but now he's "pretty sure" the numbers could work. He pointed to positive economic developments over recent months, including what he described as significant growth, a shrinking trade deficit, and reduced imports from China as evidence of successful tariff policies.

Here's the catch: these checks would need to be distributed through the tax code, which means the Treasury Department can't just start mailing them out. New legislation is required, and Congress holds the purse strings on how government revenues get spent, regardless of where that money comes from.

The Tariff Funding Question

The proposal hinges on using tariff revenue to fund the payments, but the math is getting trickier. In November, the U.S. government collected $30.75 billion in customs duties, down from $31.35 billion in October. That's the first month-over-month decrease since tariffs were imposed in April, and it's raising eyebrows about the sustainability of this funding source.

U.S. Treasury Secretary Scott Bessent remains confident in the administration's tariff policies, regardless of how the Supreme Court rules in an ongoing case about the President's authority to impose tariffs unilaterally under federal emergency powers law. Bessent suggested last month on Fox News that the checks would likely target households earning under $100,000, though he emphasized the idea was still being discussed.

Hassett expressed confidence in the administration's legal position on tariffs but said it's "pretty unlikely" the Supreme Court would order "widespread refunds" to companies.

The Arithmetic Problem

An analysis from the Tax Foundation revealed a significant problem: the numbers don't quite add up. Trump's proposal to fund $2,000 "tariff dividend" checks for American households faces a substantial arithmetic gap, with estimated costs vastly outpacing revenues by hundreds of billions of dollars. The Committee for a Responsible Federal Budget estimates the plan would cost about $600 billion annually, roughly double the revenue expected from Trump's new tariffs.

That gap explains why congressional approval is so critical. Any plan this expensive would need buy-in from lawmakers who'll need to figure out how to bridge the funding shortfall or adjust the proposal's scope.

In a separate note, Hassett said that if Trump appointed him as Fed chair, the president's opinions would likely have little influence on his interest rate decisions, a comment that addresses ongoing questions about Federal Reserve independence.