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Elon Musk’s newly established Department of Government Efficiency (DOGE) claims to have saved $160 billion by targeting wasteful and fraudulent government expenditures. However, a recent estimate from a nonpartisan advocacy group suggests that these measures could cost taxpayers $135 billion this fiscal year.
This analysis, conducted by the Partnership for Public Service (PSP), aims to quantify the costs associated with placing thousands of federal employees on paid leave, rehiring those who were mistakenly terminated, and the decline in productivity resulting from these efforts.
According to PSP, the calculation draws from the $270 billion spent annually on federal employee compensation, factoring in the repercussions of DOGE’s initiatives. Notably, this $135 billion figure does not account for expenses linked to ongoing lawsuits challenging DOGE’s actions or anticipated tax revenue losses due to staffing cuts at the IRS.
In its quest to reduce federal spending, DOGE has encouraged government employees to opt for a deferred resignation plan, allowing many to receive full pay and benefits without active work until September. Additionally, around 24,000 federal workers laid off during this initiative have been reinstated following legal rulings.
Other agencies, including the U.S. Department of Agriculture, have also reversed dismissals of key personnel, like bird flu specialists. Furthermore, federal employees now face new requirements, such as documenting weekly achievements, which has reportedly hindered overall productivity, according to Max Stier, president of the Partnership for Public Service, in remarks to CBS MoneyWatch.
“There hasn’t been sufficient scrutiny on the inefficiency the DOGE initiative seems to be generating,” Stier noted, explaining the motivation behind his group’s assessment of DOGE’s financial impact. “This initiative aimed to eliminate waste, yet we are witnessing the contrary.”
“Ultimately, it will be the public that bears the financial burden of these decisions,” he remarked, predicting that taxpayer costs are likely to rise further as more DOGE cuts are implemented.
The White House, however, has criticized this analysis. “Continual attempts to undermine the significant achievements of this unprecedented initiative to enhance governmental efficiency reflect more on the legitimacy of those spreading these inaccuracies than on DOGE’s productive work,” White House spokesperson Harrison Fields asserted. “The American public stands firmly behind the president’s mission and is not likely to be misled by false narratives from legacy media.”
Contrastingly, public opinion appears to be shifting away from DOGE’s efforts, as a new Washington Post-ABC News-Ipsos poll reveals that 57% of Americans disapprove of Musk’s management of his role within the Trump administration. Approximately 60% expressed concerns that the president might excessively reduce the federal government’s size and responsibilities.
Potential Economic Implications of Job Cuts
The IRS is planning significant workforce reductions, with a projected 40% staff cut, potentially resulting in a $323 billion loss in tax revenue over the coming decade due to decreased tax compliance and fewer audits, according to an estimate from the Yale Budget Lab.
Nonetheless, proponents of the DOGE cuts suggest that they could yield long-term benefits, leading to a more efficient federal workforce. For instance, the PSP anticipates that direct savings from these layoffs will total $38 billion over the next ten years.
Despite this, Stier cautions that taxpayer expenses could escalate as reductions ripple through the economy, affecting essential sectors like health and scientific research. A separate analysis by institutions including the University of Maryland and the University of Pennsylvania estimates that reductions in health research could lead to an annual economic loss of $16 billion and the elimination of 68,000 jobs.
“While one might hope for miraculous outcomes, this approach lacks rational coherence on many levels,” Stier remarked.
DOGE’s Transparency Measures
DOGE maintains a public ledger of the savings it claims to have achieved, labeled a “wall of receipts,” which can be accessed on its website. Yet, a CBS News investigation from February indicates that some of these purported savings may have been exaggerated.
Furthermore, the $160 billion in claimed savings falls short of Musk’s declared objective of reducing annual government spending by $2 trillion, which represents nearly a third of the federal budget. Experts express skepticism regarding the feasibility of such ambitious goals without significantly trimming major programs such as Social Security and Medicare—areas that Trump has pledged to protect.
Musk announced on Tuesday that he plans to scale back his involvement with DOGE starting in May as Tesla, the electric vehicle manufacturer he heads, experienced a staggering 71% drop in first-quarter profits and a 20% decrease in vehicle sales, partly attributed to consumer backlash over his governmental role. Nevertheless, Musk intends to dedicate one to two days each week to DOGE initiatives, emphasizing his commitment to combating government waste.
“I must continue my efforts for the rest of the president’s term to ensure that waste and fraud do not make a resurgence,” he stated during Tesla’s first-quarter earnings call.
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