Elon Musk’s Cost-Cutting Crusade May Have Backfired on Washington’s Budget

Elon Musk stormed into government with bold ambitions to overhaul federal spending. But instead of reining in the deficit, his aggressive push for “efficiency” through the Department of Government Efficiency (DOGE) may end up costing more than it saves — and shaking confidence in public administration along the way.

Brought in by President Donald Trump with sweeping authority, Musk pledged to slash $2 trillion from the federal budget. Although that figure was later dialed back, he maintained that DOGE would trim at least $1 trillion in government waste. As his tenure winds down, however, the numbers tell a different story.

While DOGE claims $175 billion in savings, critics argue that figure is vastly overstated and poorly substantiated. In fact, several independent assessments suggest that less than half of those savings are even verifiable — let alone sustainable. And paradoxically, under Musk’s watch, federal deficit projections have ballooned, with a Trump-backed spending bill expected to add $3.8 trillion.

The Promise vs. the Reality

In public remarks, Musk framed his mission as a necessary disruption — cutting deep to rebuild smarter. But federal agencies have been left reeling from abrupt staffing cuts, terminated contracts, and broken procurement processes.

Reports suggest that many of DOGE’s claimed “savings” are based on terminated agreements or vague calculations that lack sufficient documentation. Investigations have revealed errors and inconsistencies in the department’s public data, leading some analysts to call the $175 billion figure “aspirational at best.”

For example, DOGE’s touted savings of $1,086 per taxpayer are based on flawed math, experts say. The calculation undercounts the actual number of taxpayers in the U.S., inflating the supposed benefit.

Hidden Costs of ‘Efficiency’

Beyond the suspect accounting, the deeper issue may be the unintended consequences of Musk’s strategy. Cutting staff at agencies like the IRS reduces the government’s ability to collect revenue. National parks and regulatory bodies are operating short-handed. Even essential personnel, such as nuclear safety experts, were laid off and later rehired — at higher cost.

Betsey Stevenson, a former chief economist at the U.S. Labor Department, warned that the cost of retraining and rehiring could easily wipe out the savings DOGE claims. Legal challenges from fired employees and canceled contracts are also expected to drag on for years, creating further liabilities.

“The government may have spent as much generating these cuts as it claims to have saved,” Stevenson noted.

Workforce Fallout

DOGE’s approach has sparked unrest across the federal workforce. Morale is plummeting, productivity is down, and a wave of experienced employees have exited government altogether. Critics argue the administration prioritized optics over sustainability.

Max Stier, CEO of the Partnership for Public Service, described the campaign as “arson of a public asset,” and warned that the federal workforce — already under strain — has been deeply destabilized.

“There’s trauma in the system,” said Stier. “People are afraid for their jobs, talent is fleeing, and agencies are scrambling to maintain operations.”

The DOGE Legacy: Flash or Foundation?

Despite its turmoil, DOGE has undeniably changed the national conversation around government spending. Its aggressive tactics brought a Silicon Valley-style disruption to bureaucratic inertia, and in some cases, there are examples of cutbacks followed by strategic reinvestment.

But whether DOGE becomes a model for future reform or a cautionary tale is still unclear. Jessica Tillipman, a government contracting expert at George Washington University, cautioned that the current environment has made the U.S. government a less reliable partner for private contractors.

“Trust in the government’s ability to honor contracts has been shaken,” she said. “That’s bad for business and bad for governance.”

A Long Road Ahead

DOGE’s ultimate impact may not be measurable for years. According to experts like Nat Malkus of the American Enterprise Institute, many of its cost-saving claims are unverifiable. And unless Congress passes formal legislation to rescind unused funds, those supposed “savings” remain on paper only.

Meanwhile, federal spending continues to rise — projected to grow by 9% in 2025 — largely due to demographic shifts and rising costs in entitlement programs like Medicare and Social Security. These are areas DOGE did not touch.

“No matter how sharp your chainsaw,” Stevenson said, “you’re not going to fix the federal budget without addressing the real drivers of the deficit.”

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