Trump’s Desperate Midterm Remedy: Cash Handouts as His Core Support Base Erodes

Republicans’ midterm peril intensifies as cost-of-living discontent spreads
Cash payouts, lower oil prices and even the North Korea card deployed
Fiscal and inflationary burdens risk mounting after short-term appeals to voters

With less than two months remaining before the midterm elections, U.S. President Donald Trump has begun rolling out promises of cash payments, tax cuts and lower oil prices in a bid to secure votes. After pledging a substantial dividend for American adults if Republicans retain control of both chambers of Congress, he also announced plans to refund premiums to Obamacare enrollees. As the protracted Iran war and elevated inflation unsettle even his core constituency of white working-class voters, Trump is accelerating efforts to reopen dialogue with North Korea while pressing for expanded tax relief and lower interest rates to stimulate the economy before the election. Critics warn, however, that the cash payments and additional tax cuts intended to improve voters’ perceptions of the economy lack any credible funding plan and could exacerbate the national debt and inflation while further increasing household interest burdens.

$500 Refunds for 1 Million Obamacare Enrollees

On September 10, local time, Trump posted a roughly two-minute video address on the White House’s official X account, writing, “Our administration discovered that American families who purchased health insurance through the disastrous Obamacare exchanges under Sleepy Joe—our derisive name for former President Joe Biden—were massively overcharged,” and adding, “We will refund $500 per person in excess premiums to 1 million people across 30 states.”

He said the overcharges totaled at least $500 million, alleging, “The previous administration knew about this and even investigated it, but simply kept the money. They told no one.” He continued, “Our administration is doing the right thing and returning money to people who were unfairly exploited,” confirming that the refunds would be distributed. Trump added that the payments would be issued “in just a few weeks.” The White House elaborated in a statement released the same day that “checks will begin to be mailed to eligible Americans in October 2026.”

$5,000 for Every U.S. Adult if Republicans Win the Midterms

However, with the federal government pursuing nationwide cash payments just one month before the election, controversy over vote-buying populism is likely to intensify. The dividend Trump promised a day earlier during a speech at the Republican midterm convention in Dallas, Texas, has likewise drawn accusations of electoral inducement. Trump unveiled the surprise pledge to pay every U.S. adult a $5,000 dividend if Republicans preserve their majorities in both the House and Senate in the coming midterm elections.

Although he disclosed neither a specific funding mechanism nor a payment timetable, the approximately 270 million adults in the United States would put the estimated cost at $1.35 trillion. That is comparable to the $1.27 trillion in interest on the national debt that the U.S. government has paid so far this fiscal year. Trump suggested that tariff revenue could potentially be used to finance the payments but did not clarify whether congressional legislation would be required to authorize them.

The pledge represents a high-stakes gambit unveiled with only about two months remaining before the midterms. Growing discontent over the cost of living and the prolonged Iran war has weakened support for Trump and the Republican Party. Concerns are mounting that Republicans could lose their Senate majority as well as control of the House. “Pretend that I am on the ballot,” Trump said that day as he appealed to his supporters to rally behind the party. He also asserted that “Iran is in a position where it cannot hold out much longer” and that “the Iran war will end immediately after the midterms, and oil prices will plunge.” Warning that a Democratic victory would set the United States back, he declared, “If you vote Republican, we will dominate the world for generations to come.”

Table 1. President Trump’s Cash-Payment Proposals

Electoral Calculations Shape Brinkmanship With Iran

Trump’s decision to specify immediately after the midterms as the endpoint of the war reflects the intersection of U.S. domestic politics and Iran’s negotiating calculus. Iran continues to control the Strait of Hormuz and launch retaliatory attacks targeting U.S. forces and Gulf states, deepening war fatigue within the United States and increasing the burden of energy costs. The strategy appears designed to extract greater concessions in future negotiations by holding out until the November 3 midterms and weakening Trump’s political standing.

The U.S. approach to the war also appears to be shifting in line with the electoral calendar. Reuters reported that White House aides are seeking to contain the conflict at a low level to prevent escalation before November, prioritizing sanctions and blockades over large-scale military operations. With Washington attempting to avoid escalation before the election and Tehran seeking to raise the cost of the war until then, November 3 has emerged as a critical inflection point in the confrontation between the two countries.

The dynamics of U.S. midterm elections, which traditionally serve as a referendum on the incumbent president, underpin Iran’s increasingly viable “holdout strategy.” In the 20 midterm elections held since World War II, the president’s party increased its number of House seats only twice, in 1998 and 2002. The Economist’s election model in May placed the probability of Democrats winning a House majority at 95%. More recently, even the Senate—previously considered favorable terrain for Republicans—has shifted into toss-up territory, adding further pressure on the White House.

71% Disapprove of Cost-of-Living Response as Inflation Roils Midterms

The cost of living is the most formidable political liability weighing on Republicans. In a Reuters/Ipsos survey conducted late last month, 47% of registered voters identified the cost of living as the most important factor in determining their midterm vote. As many as 71% disapproved of Trump’s handling of the issue, while only 22% approved. Support for the Iran war stood at just 31%, leaving the White House and Republicans with a mounting political burden from the protracted conflict and the strain that elevated oil prices have placed on household finances.

The shift in voter sentiment was also evident in Democratic primaries. Former Army Lieutenant Colonel Alexander Vindman, who rose to prominence during the first Trump administration’s impeachment inquiry, and Representatives Diana DeGette and Dan Goldman—all regarded as “Symbols of Resistance”—suffered successive defeats. By contrast, Florida State Representative Angie Nixon, who made the cost of living a central campaign issue, won her Senate primary. Democratic voters’ attention has shifted away from candidates’ past records of confronting Trump and toward practical economic policies capable of alleviating immediate household expenses.

This explains why Trump has repeatedly turned to cash-payment proposals. His strategy is to generate a tangible effect before the election through the $500 premium refund scheduled for October while using the promise of a $5,000 dividend if Republicans retain both chambers of Congress to mobilize turnout among his supporters. He has supplemented these pledges with a promise to end the Iran war, lower oil prices and push gasoline below $2 per gallon. Confronted by Democratic attacks centered on the cost of living, Trump has launched his own appeal to economically anxious voters through promises of cash payments and lower oil prices.

Signs of White Working-Class Defection Prompt Push for U.S.–North Korea Talks

Trump’s succession of election-oriented initiatives reflects growing alarm over signs of defection among white working-class voters, a core constituency. In a CBS/YouGov survey conducted in May, 54% of white voters without college degrees disapproved of Trump’s job performance, while only 46% approved. The disapproval rating had risen by 22 percentage points in 15 months from 32% in February last year, and negative assessments of his economic policies exceeded positive evaluations by 22 percentage points.

White working-class voters were instrumental in both of Trump’s presidential victories. They supported him in response to his promises to restore manufacturing jobs and avoid overseas wars, but discontent has increased as tariff burdens suppress corporate investment and gasoline prices surge in the wake of the Iran war. As expectations of improved living standards fade, Republicans must now contend with the possibility that supporters in battleground states such as Ohio, Michigan and Pennsylvania will abstain from voting altogether.

As the need to consolidate his political base has become more urgent, Trump has also accelerated efforts to resume dialogue with North Korea. The move is widely interpreted as an attempt to secure a diplomatic achievement before the midterms and reverse the decline in his approval ratings. After ordering a substantial reduction in U.S.–South Korea joint military exercises, he has repeatedly expressed a desire to meet North Korean leader Kim Jong Un before the end of the year. The Asia-Pacific Economic Cooperation summit in Shenzhen, China, regarded as a potential venue for a U.S.–North Korea summit, is scheduled for November 18–19, after the midterm elections. This has prompted speculation that the White House could bring forward the resumption of bilateral dialogue or an agreement on a summit to October and deploy it as an “October Surprise”—an unexpected development immediately before an election that decisively affects voter sentiment. The calculation is that a diplomatic breakthrough with North Korea could offset the deterioration in public opinion caused by the prolonged Iran war.

Tax Cuts and Lower Interest Rates Promoted as Inflation Remedies

The administration is also pursuing increasingly aggressive gambits in economic policy. In addition to cash payments, the White House is seeking to stimulate the economy before the midterms through tax cuts. Under the One Big Beautiful Bill Act (OBBBA) enacted last year, tax relief applies to tips, overtime pay and interest on loans for American-made vehicles, while deductions for seniors and the child tax credit have also been expanded. Businesses are permitted to deduct the full cost of production-equipment purchases in the first year of acquisition. According to the U.S. Treasury Department, 53 million taxpayers received at least one tax benefit this year, with the average reduction exceeding $800. The average tax refund also increased by 11% from the previous year to more than $3,400. The measures are intended to strengthen households’ spending capacity and encourage businesses to bring investment forward, maximizing the stimulus effect before the election.

Some Republicans have gone further by demanding additional tax cuts. Senators Ted Cruz and Tim Scott have urged the Treasury Department to exclude inflationary gains from capital-gains calculations through executive action without congressional legislation. The proposal is estimated to cost $200 billion, although the U.S. Justice Department previously determined that such a measure would require congressional approval. An analysis by the University of Pennsylvania’s Wharton School found that 86% of the tax benefits would accrue to the top 1% of earners. Trump has pressed the Federal Reserve to cut interest rates while claiming that the U.S. economy could grow by 15%, although this year’s growth forecast stands at approximately 2.4%. Moreover, with producer-price inflation reaching 5.4% in August and the 10-year U.S. Treasury yield surging to 4.92%, concerns are mounting that the combination of further tax cuts and lower interest rates could drive inflation and household borrowing costs higher once again. Critics warn that policies presented as a means of alleviating the cost of living could instead raise both consumer prices and interest charges on mortgages and auto loans.