Bescent stated that "Congress approval is needed," and Trump's $2,000 tax rebate has become a "bad check"?

The plan proposed by Trump to issue $2,000 tariff "dividend" checks to American citizens faces real challenges, with Treasury Secretary Becerra stating that the proposal requires congressional legislative approval.

On Sunday local time, when asked about the plan during a media interview, Becerra responded, "We are waiting to see. We need legislation for this." This statement marks the first clear indication from a core member of the Trump administration regarding the implementation path of the plan, effectively dousing the market's optimistic expectations with cold water.

Becerra's remarks stand in stark contrast to Trump's recent positive promotion. Last Friday, Trump told reporters aboard "Air Force One" that these checks would be distributed to "everyone except the rich" sometime next year. He emphasized, "This is a lot of money, but we also have a lot of funds from tariffs. Tariffs allow us to pay dividends." Trump even claimed that this move would help reduce debt.

However, Becerra also hinted at another possibility, suggesting that the so-called "dividend" might merely be a "repackaging" of existing tax reduction policies. He stated on another occasion that the $2,000 "dividend" could take various forms, potentially including tax relief measures in the president's agenda, such as tax exemptions for tips, overtime pay, and Social Security income.

This indicates that as the direct cash distribution plan faces resistance, the U.S. government may turn to policy promotion to achieve its political goals, which is far from the direct cash payments the public expects.

Huge Funding Gap

From a fiscal perspective, the "tariff dividend" plan faces the most direct challenge of a massive gap between its enormous costs and actual revenues.

According to preliminary estimates from the centrist watchdog organization Committee for a Responsible Federal Budget, if the plan is designed similarly to the economic stimulus payments during the COVID-19 pandemic, covering adults and children, the cost of each round of payments could reach approximately $600 billion.

However, the tariff revenues supporting this plan are far from sufficient to cover such enormous expenditures. As of the fiscal year data up to September this year, the total net tariff revenue for the U.S. was $195 billion. Many economists predict that the total tariff revenue for the calendar year 2025 will only be about $300 billion. This means that the cost of issuing $2,000 checks could be twice the expected annual tariff revenue, making Trump's claim of "paying dividends with tariffs and reducing debt" mathematically untenable.

Legislative Obstacles and Political Realities

In addition to funding issues, the plan's political path in Washington is also fraught with difficulties. As Becerra pointed out, any large-scale direct payments would require congressional approval.

This means the proposal must secure at least 60 votes in the Senate to overcome potential procedural hurdles. Given the current political landscape, it is nearly impossible for Democrats to support a bill aimed at helping Trump address the "affordability of living costs" issue facing his administration. Political analysts have noted that the likelihood of the plan passing Congress is extremely low. In addition, tariff revenue itself also faces uncertainty. Reports indicate that the Trump administration is facing a judicial challenge to its tariff authority, with the Supreme Court's ruling outcome still unknown. At the same time, there are reports that the government plans to implement large-scale tariff exemptions on food and other necessities in the near future, which will further reduce the funding available for "dividends."

Are "dividends" a "repackaging" of tax cuts?

Faced with dual financial and political barriers, the Trump administration seems to be preparing an alternative narrative. Bessent has hinted that "the $2,000 dividend may take various forms," including redefining already enacted or proposed tax cuts as part of the "dividend."

This is seen as a potential strategy: If the plan to distribute cash directly cannot be realized, the government can package and promote already implemented policies such as "tip tax exemption" and "overtime pay tax exemption," claiming they are equivalent to providing the public with a $2,000 "dividend." While this move can sustain the political slogan of "giving you money," it is far from the promise of directly mailing checks to the public.

In fact, Trump has always favored direct cash payments that can bear his name. From pushing for $2,000 stimulus checks during the COVID-19 pandemic to the previous immature idea of "DOGE dividends," it reflects his preference for shaping government benefits as personal gifts.

However, economists also point out the inherent contradictions in this model: If the purpose of distributing dividends is to offset the costs imposed on consumers by tariffs, then why not abandon the collection of tariffs from the beginning? This is no different from a "huge game of back-and-forth funding." For the market and investors, this means that the plan is more of a political gesture rather than a prudent fiscal policy