That’s how a lot Elon Musk, co-chair of President-elect Donald Trump’s new “Division of Authorities Effectivity,” or DOGE, has mentioned he can lower out of the annual federal finances. Musk and his companion Vivek Ramaswamy have recommended 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 applications “like Medicare and Medicaid,” they are saying, however “waste, fraud, and abuse that almost all taxpayers want to finish.”
In case you may truly lower 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 isn’t any manner in hell Musk and Ramaswamy are going to have the ability to determine $2 trillion in annual spending to chop, and so they actually won’t get wherever close to that quantity with out congressional motion.
To see why, seek the advice of this easy 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 lower 1 cent from Social Safety, in order that’s roughly $1.6 trillion out of the $7 trillion finances off the desk.
The following-largest is curiosity funds on federal debt, collected 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 possibly international, monetary disaster and recession. Whereas we are able to cut back future deficits and pay much less curiosity sooner or later, we’re obligated to pay curiosity on debt we’ve already collected.
So there’s nothing to avoid wasting 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 Road 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 Providers chair Roger Wicker (R-MS), have proposed trillions in extra spending to counter China. Trump’s perspective towards the protection finances, 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 finances.
So what would they probably lower? They may look first to Medicare and Medicaid, that are chargeable for over $1.5 trillion. Musk and Ramaswamy insisted that these aren’t their targets, but it surely’s onerous to see how they’d keep away from that. For one factor, there are locations the place Medicare particularly 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 primary instance. For one more, Trump proposed huge cuts to Medicaid final time period.
Then there’s non-defense discretionary spending, a grab-bag class that features all spending licensed by means of annual appropriations payments reasonably 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. Help for science, public well being/analysis, regulation enforcement, and training (together with federal help for Okay–12 colleges) every obtain round or just a little over $100 billion yearly. This class has been lower to the bone for the reason that 2010s as it’s, and it’s onerous to think about Musk and Ramaswamy going up towards veterans or cops.
Lastly, there’s different obligatory spending, not damaged out within the above chart however together with a big selection of security web applications:
Big chunks of this really feel politically and virtually off-limits. Navy retirement and veterans’ advantages (which fall beneath each the non-defense discretionary and obligatory elements of the finances) appear politically unimaginable to chop, and even civilian worker retirements could be tough 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 help. Trump and JD Vance have proposed increasing the kid tax credit score, making financial savings there unlikely.
That leaves applications like meals stamps, the Inexpensive Care Act medical health insurance credit, and unemployment insurance coverage.
Let’s suppose that Musk and Ramaswamy determine to actually go for it. They’re going to chop non-defense discretionary spending in half, perhaps by shutting down all scientific and well being analysis and Okay–12 college support. 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 unimaginable to push by means of. For the sake of argument, let’s suppose that is the package deal.
Doing the mathematics, even this unbelievably formidable package deal would quantity to just a little over $1.1 trillion yearly. It’s barely midway to Musk’s said aim.
The notion that the federal authorities is hopelessly bloated resulting from waste that each affordable particular person desires to remove is an interesting fable, but it surely’s a fable. Authorities spending overwhelmingly goes to wildly widespread applications like Social Safety, Medicare, Medicaid, veterans’ advantages, and the protection finances. You possibly can’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.
