Two. Trillion. Dollars.
That’s how much Elon Musk, co-chair of President-elect Donald Trump’s new “Department of Government Efficiency,” or DOGE, has said he can cut out of the annual federal budget. Musk and his partner Vivek Ramaswamy have suggested that they can achieve this through “mass head-count reductions across the federal bureaucracy,” by cracking down on spending “unauthorized” by Congress, and “large-scale audits” of federal contracts. Their target wouldn’t be entitlement programs “like Medicare and Medicaid,” they say, but “waste, fraud, and abuse that nearly all taxpayers wish to end.”
If you could actually cut this much, it would wipe out the US’s $1.9 trillion deficit and put the country into surplus for the first time since the 2001 fiscal year. But let’s be clear: There is no way in hell Musk and Ramaswamy are going to be able to identify $2 trillion in annual spending to cut, and they certainly will not get anywhere near that number without congressional action.
To see why, consult this simple chart of projected federal spending in fiscal year 2025, which began on October 1:
I’m using the current fiscal year, but you’ll see something similar in any given year. The biggest single program is Social Security (which I’ve grouped here with its companion program, Supplemental Security Income). Trump has promised he will not cut 1 cent from Social Security, so that’s roughly $1.6 trillion out of the $7 trillion budget off the table.
The next-largest is interest payments on federal debt, accumulated from prior deficits. Musk’s America PAC has bafflingly listed this as a form of government waste, but failing to pay interest on past debt would constitute a US default and likely lead to a national, and probably global, financial crisis and recession. While we can reduce future deficits and pay less interest in the future, we’re obligated to pay interest on debt we’ve already accumulated.
So there’s nothing to save here either. Already we’ve ruled out over a third of total spending.
Next up is defense spending. Musk and Ramaswamy highlighted wasteful Pentagon spending in their Wall Street Journal op-ed, so this money could face some cuts. But Trump massively increased defense spending in his first years in office, and his congressional allies, like incoming Senate Armed Services chair Roger Wicker (R-MS), have proposed trillions in additional spending to counter China. Trump’s attitude toward the defense budget, as with his attitude on so many things, vacillated wildly during his first term, so perhaps he will side with Musk and Ramaswamy and seek to lower defense spending. But that’s far from guaranteed.
If defense spending is off the table, we’ve ruled out more than half the budget.
So what would they likely cut? They might look first to Medicare and Medicaid, which are responsible for over $1.5 trillion. Musk and Ramaswamy insisted that these are not their targets, but it’s hard to see how they’d avoid that. For one thing, there are places where Medicare in particular overspends where policymakers in both parties want to crack down; its practice of paying more for care in hospitals than at smaller facilities is a prime example. For another, Trump proposed massive cuts to Medicaid last term.
Then there’s non-defense discretionary spending, a grab-bag category that includes all spending authorized through annual appropriations bills rather than mandated by other legislation. The biggest category is transportation, which pays for things like air traffic control and national highways. Next up is veterans’ care and benefits. Support for science, public health/research, law enforcement, and education (including federal support for K–12 schools) each receive around or a little over $100 billion annually. This category has been cut to the bone since the 2010s as it is, and it’s hard to imagine Musk and Ramaswamy going up against veterans or cops.
Finally, there’s other mandatory spending, not broken out in the above chart but including a wide array of safety net programs:
Huge chunks of this feel politically and practically off-limits. Military retirement and veterans’ benefits (which fall under both the non-defense discretionary and mandatory parts of the budget) seem politically impossible to cut, and even civilian employee retirements would be difficult to cut back given that employees have paid into those accounts themselves for years.
The Children’s Health Insurance Program and foster care have long enjoyed bipartisan support. Trump and JD Vance have proposed expanding the child tax credit, making savings there unlikely.
That leaves programs like food stamps, the Affordable Care Act health insurance credits, and unemployment insurance.
Let's suppose that Musk and Ramaswamy decide to really go for it. They're going to cut non-defense discretionary spending in half, maybe by shutting down all scientific and health research and K–12 school aid. They're slashing Medicare and Medicaid by a quarter, and they're eliminating food stamps, ACA credits, and unemployment insurance entirely. These, to be clear, are all cuts that would require congressional approval and that Musk, Ramaswamy, and Trump could not achieve through executive action alone. Furthermore, they're cuts that seem politically impossible to push through. For the sake of argument, let’s suppose this is the package.
Doing the math, even this unbelievably ambitious package would amount to a little over $1.1 trillion annually. It’s barely halfway to Musk’s stated goal.
The notion that the federal government is hopelessly bloated due to waste that every reasonable person wants to eliminate is an appealing myth, but it’s a myth. Government spending overwhelmingly goes to wildly popular programs like Social Security, Medicare, Medicaid, veterans’ benefits, and the defense budget. You can’t make much of a dent in it without touching those areas, and once you touch them, you’re going to get immense backlash.
