 "Doge emerged from Musk's musings at a 2023 dinner party, says report. Now, he controls US bureaucracy. AP")
Despite Elon Musk’s aggressive cost-cutting initiatives, US federal spending has not slowed down. In fact, it climbed to a record $603 billion last month, according to new Treasury data.
That raises some uncomfortable questions about Musk’s Department of Government Efficiency (Doge) and how it has been touting more than $100 billion in savings.
For all the boasting by the billionaire-headed department, few agencies recorded any significant reductions in the first full month of the new administration. Overall spending rose $40 billion from the same period last year, marking a 7 per cent increase, Financial Times reported.
Musk and his team, operating under the Doge initiative, have made deep inroads into federal agencies, including the State and Health departments, as well as branches of the Treasury. Thousands of federal workers have been laid off or suspended, and numerous government contracts and grants have been cancelled.
Big layoffs without big savings
Musk has claimed that Doge is on track to slash $1 trillion from the federal budget, asserting that cuts are being identified at a rate of $4 billion per day. However, the latest Treasury report indicates that major spending categories have remained largely untouched. The Department of Education recorded a $6 billion reduction, but officials noted that other agencies saw little to no savings.
The Treasury referred further questions on spending reductions to Doge. A spokesperson for Doge did not immediately respond to a request for comment.
“Doge savings are so small as not to be identifiable in monthly spending totals,” said Jessica Riedl, an economic policy expert at the conservative Manhattan Institute.
The figures also spotlight the difficulty in making significant cuts that align with Republican priorities. Secretary of State Marco Rubio oversaw a substantial reduction in the US Agency for International Development’s budget, which was halved to $226 million from $547 million a year ago.
However, those cuts were overshadowed by a modest 3 per cent increase in healthcare spending, which added $5 billion, and a 6 per cent rise in Social Security payments, costing an additional $8 billion.
Impact Shorts
More Shorts“Some 75 per cent of all federal spending goes to social security, Medicaid, Medicare, defence, veterans and interest — and none of that has been touched,” Riedl said. “There is no clear indication that Doge has achieved meaningful reductions.”
Musk’s promises meet harsh reality
On Monday, Musk vowed to ramp up Doge’s efforts, pledging to double its staff and expand the initiative to major entitlement programs such as Social Security.
Meanwhile, Treasury spending soared by $29 billion over the past year, driven by a $10 billion increase in debt servicing costs, which reached $86 billion, and a $14 billion rise in tax credits and related payments.
President Trump has recently sought to rein in some of Doge’s activities, telling Musk during a cabinet meeting that agency leaders retain ultimate authority over personnel decisions and urging him to use a “scalpel” rather than a “hatchet”.
The move follows growing pushback from Republican lawmakers who have raised concerns about the speed and breadth of Doge’s cuts. Several agencies have been forced to rehire employees for critical projects, including those related to nuclear safety.
Federal courts have also intervened, pausing or overturning some of Doge’s actions. Last week, the Supreme Court narrowly upheld an order requiring the administration to release nearly $2 billion in foreign aid funds for previously completed projects.