That’s how a lot Elon Musk, co-chair of President-elect Donald Trump’s new “Division of Authorities Effectivity,” or DOGE, has stated he can minimize out of the annual federal funds. Musk and his associate Vivek Ramaswamy have urged that they will obtain this by means of “mass head-count reductions throughout the federal paperwork,” by cracking down on spending “unauthorized” by Congress, and “large-scale audits” of federal contracts. Their goal wouldn’t be entitlement packages “like Medicare and Medicaid,” they are saying, however “waste, fraud, and abuse that almost all taxpayers want to finish.”
If you happen to may really minimize this a lot, it could wipe out the US’s $1.9 trillion deficit and put the nation into surplus for the first time for the reason that 2001 fiscal yr. However let’s be clear: There is no such thing as a means in hell Musk and Ramaswamy are going to have the ability to establish $2 trillion in annual spending to chop, and so they definitely won’t get anyplace close to that quantity with out congressional motion.
To see why, seek the advice of this straightforward chart of projected federal spending in fiscal yr 2025, which started on October 1:
I’m utilizing the present fiscal yr, however you’ll see one thing comparable in any given yr. The largest single program is Social Safety (which I’ve grouped right here with its companion program, Supplemental Safety Revenue). Trump has promised he won’t minimize 1 cent from Social Safety, in order that’s roughly $1.6 trillion out of the $7 trillion funds off the desk.
The subsequent-largest is curiosity funds on federal debt, gathered from prior deficits. Musk’s America PAC has bafflingly listed this as a type of authorities waste, however failing to pay curiosity on previous debt would represent a US default and certain result in a nationwide, and doubtless world, monetary disaster and recession. Whereas we are able to scale back future deficits and pay much less curiosity sooner or later, we’re obligated to pay curiosity on debt we’ve already gathered.
So there’s nothing to save lots of right here both. Already we’ve dominated out over a 3rd of whole spending.
Subsequent up is protection spending. Musk and Ramaswamy highlighted wasteful Pentagon spending of their Wall Avenue Journal op-ed, so this cash may face some cuts. However Trump massively elevated protection spending in his first years in workplace, and his congressional allies, like incoming Senate Armed Companies chair Roger Wicker (R-MS), have proposed trillions in extra spending to counter China. Trump’s perspective towards the protection funds, as along with his perspective on so many issues, vacillated wildly throughout his first time period, so maybe he’ll facet with Musk and Ramaswamy and search to decrease protection spending. However that’s removed from assured.
If protection spending is off the desk, we’ve dominated out greater than half the funds.
So what would they possible minimize? They may look first to Medicare and Medicaid, that are liable for over $1.5 trillion. Musk and Ramaswamy insisted that these will not be their targets, nevertheless it’s laborious to see how they’d keep away from that. For one factor, there are locations the place Medicare specifically overspends the place policymakers in each events need to crack down; its apply of paying extra for care in hospitals than at smaller services is a major instance. For one more, Trump proposed large cuts to Medicaid final time period.
Then there’s non-defense discretionary spending, a grab-bag class that features all spending approved by means of annual appropriations payments moderately than mandated by different laws. The largest class is transportation, which pays for issues like air site visitors management and nationwide highways. Subsequent up is veterans’ care and advantages. Assist for science, public well being/analysis, legislation enforcement, and training (together with federal assist for Okay–12 colleges) every obtain round or a bit over $100 billion yearly. This class has been minimize to the bone for the reason that 2010s as it’s, and it’s laborious to think about Musk and Ramaswamy going up towards veterans or cops.
Lastly, there’s different necessary spending, not damaged out within the above chart however together with a big selection of security internet packages:
Enormous chunks of this really feel politically and virtually off-limits. Army retirement and veterans’ advantages (which fall underneath each the non-defense discretionary and necessary elements of the funds) appear politically not possible to chop, and even civilian worker retirements could be troublesome to chop again provided that workers have paid into these accounts themselves for years.
The Kids’s Well being Insurance coverage Program and foster care have lengthy loved bipartisan assist. Trump and JD Vance have proposed increasing the kid tax credit score, making financial savings there unlikely.
That leaves packages like meals stamps, the Reasonably priced Care Act medical health insurance credit, and unemployment insurance coverage.
Let’s suppose that Musk and Ramaswamy determine to essentially go for it. They’re going to chop non-defense discretionary spending in half, possibly by shutting down all scientific and well being analysis and Okay–12 faculty assist. They’re slashing Medicare and Medicaid by 1 / 4, and so they’re eliminating meals stamps, ACA credit, and unemployment insurance coverage totally. These, to be clear, are all cuts that will require congressional approval and that Musk, Ramaswamy, and Trump couldn’t obtain by means of government motion alone. Moreover, they’re cuts that appear politically not possible to push by means of. For the sake of argument, let’s suppose that is the package deal.
Doing the maths, even this unbelievably formidable package deal would quantity to a bit over $1.1 trillion yearly. It’s barely midway to Musk’s said aim.
The notion that the federal authorities is hopelessly bloated as a result of waste that each affordable particular person needs to remove is an interesting delusion, nevertheless it’s a delusion. Authorities spending overwhelmingly goes to wildly common packages like Social Safety, Medicare, Medicaid, veterans’ advantages, and the protection funds. You’ll be able to’t make a lot of a dent in it with out touching these areas, and when you contact them, you’re going to get immense backlash.