Investor Peter Schiff said Tuesday that the Constitution gives Congress the power of the purse, dismissing Treasury Secretary Scott Bessent's claim that his department is examining whether it needs congressional approval for the $5,000 dividend promise, and demanded Republicans call for his resignation.

Treasury Is 'Examining' If Congress Must Approve the Payments

At a House Financial Services Committee hearing, Rep. Emanuel Cleaver (D-MO) pressed Bessent on whether President Donald Trump could authorize the payments without Congress.

Bessent said Treasury was "currently examining" whether the payments would require congressional consent, adding he would meet with House Speaker Mike Johnson (R-La.) "if it becomes clear that we need congressional authority."

"Bessent doesn't know that the U.S. Constitution leaves the power of the purse to Congress," Schiff said in a post on X, adding that the "Republicans must call for his resignation as Treasury Secretary."

The Treasury Department did not immediately respond to MarketDash's request for a comment.

At the Republican convention in Dallas last week, the president pledged a $5,000 "Trump dividend" to every adult U.S. citizen if Republicans retain both the House and Senate in November's midterm election.

The Payments Wouldn't Affect The Budget

Schiff also called out Bessent's claim that the $5,000 payments wouldn't affect the deficit.

Cleaver asked whether Bessent had concerns that a $1.8 trillion deficit would worsen if every American received $5,000.

Bessent said putting more money in Americans' pockets "should be an objective for everyone," adding he believed "there are ways to do it that would not affect the deficit."

When pressed to explain how, Bessent said that Treasury had "been working on it for quite a while" and wasn't "ready to discuss it at present."

The U.S. debt currently stands at $40.16 trillion, and the dividend proposal would cost roughly $1.2 trillion, based on about 240 million eligible adults.

A Warning About Political Backfire

Schiff separately warned that Democrats could counter with their own $5,000 payment proposal, subject to a means test, putting Republicans in a bind.

He asked whether a Republican Senate would block a Democratic version of the payments, and whether Trump would veto it.

"Trump is the best ally big government loving Democrats have," he said, warning that it risks "exploding deficits and soaring inflation."

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.