Shortly before last fall’s presidential election, Elon Musk breezily estimated that a second Trump administration could reduce annual federal spending by “at least” $2 trillion. At a press conference in February, the billionaire entrepreneur, who at that point had been unofficially overseeing the cost-cutting project known as the Department of Government Efficiency (DOGE) for a few weeks, cut that estimate in half, saying he expected that DOGE would find about $1 trillion in annual savings by attacking “waste and fraud.” During a Cabinet meeting last Thursday, Musk downgraded his target again, saying, “We anticipate savings in FY26 from reduction of waste and fraud [of] $150 billion.”
Musk, who credited President Donald Trump’s “fantastic leadership,” “this amazing Cabinet,” and “the very talented DOGE team,” said he was “excited to announce” that figure. But it amounts to 93 percent less than his original estimate, 85 percent less than the goal he thought was realistic two months ago, and about 2 percent of federal spending last fiscal year. That is quite a comedown, especially since this seems to be all that Musk expects to accomplish: DOGE sunsets on July 4, 2026, a few months before the end of FY 2026. Worse, it is doubtful, given the numerous errors that have been found in data reported by DOGE, that even the new, much more modest projection can be trusted.
“They’re just spinning their wheels, citing in many cases overstated or fake savings,” said Romina Boccia, director of budget and entitlement policy at the Cato Institute, told The New York Times a few days ago. “What’s most frustrating is that we agree with their goals. But we’re watching them flail at achieving them.”
Despite Musk’s dramatically downgraded goal, the Times notes, DOGE is “still overstating its progress.” The estimate is inflated “by including billion-dollar errors, by counting spending that will not happen in the next fiscal year—and by making guesses about spending that might not happen at all.”
The estimate that Musk offered at the Cabinet meeting is roughly the same as the $155 billion in “estimated savings” that DOGE claims on its website, which is up from $140 billion at the beginning of the month. Although Musk implied that all those savings would be realized in fiscal year 2026, the website does not distinguish between annual and total savings, and many of the items listed on its “Wall of Receipts” include spending reductions that span several years.
The “estimated savings” include “asset sales, contract/lease cancellations and renegotiations, fraud and improper payment deletion, grant cancellations, interest savings, programmatic changes, regulatory savings, and workforce reductions.” At least two of those categories seem dubious: Asset sales are a one-time source of revenue rather than an annual source of savings, while “regulatory savings,” assuming that phrase refers to a reduction in costs imposed on the private sector, do not necessarily imply any reduction in government spending.
DOGE has publicly itemized just 40 percent of its claimed savings, all of which fall into one of two listed categories. It claims to have saved $33 billion by canceling grants, $28 billion by canceling contracts, and $350 million by canceling leases.
News organizations have been highlighting problems with those numbers for months. On February 19, when DOGE was claiming $16.5 billion in contract savings, NPR found that the actual number, based on confirmed cancellations, was about $2 billion—88 percent less. DOGE’s hyperbole was so pervasive that Manhattan Institute budget expert Jessica Riedl, in a February 28 interview with New York Times columnist David French, described its work as “government spending-cut theater,” saying “most of what is claimed to be spending cuts are just accounting errors.”
Although DOGE has revised or deleted some erroneous line items after journalists pointed out its mistakes, the general pattern of exaggeration continues. The Times notes that DOGE claims to have saved $318,310,328 by canceling an Office of Personnel Management contract that was never awarded.
That line item refers to “a request for proposal that the Office of Personnel Management had published, seeking bids for help with human-resources work,” the Times reports. “When announcing these requests, government agencies describe the work they want done. Contractors submit proposals, with both a plan and a price. The government can choose one vendor, or several. Even after that, it often negotiates with them to push the price below their original bids.”
In an interview with the Times, Steven L. Schooner, an expert on federal contracting at George Washington University, called DOGE’s precise-seeming figure “silly” and “garbage” because “you don’t know what’s going to happen” by the end of the bidding process, which might have resulted in substantially less spending, especially in any given fiscal year, or no contract at all. DOGE addresses those uncertainties by describing this “contract termination” as a “solicitation.” It nevertheless counts the entire figure as “savings.”
DOGE is still listing a $1.9 billion IRS tech support contract with Centennial Technologies that was terminated during the Biden administration. After the Times noted that mistake, the contract disappeared from DOGE’s list, but now it is back. It is the second-largest item on DOGE’s “Wall of Receipts.”
The third-largest item “comes from a canceled grant to a vaccine nonprofit,” the Times notes. Although “Musk’s group says that saved $1.75 billion,” the organization “said it had actually been paid in full, so the savings was $0.”
You get the idea. If the 40 percent share of “estimated savings” that DOGE has itemized is riddled with errors like these, it is hard to have much faith in the spending reductions it claims in vague categories such as “programmatic changes” and “fraud and improper payment deletion.”
That last category alone potentially could generate much more savings than the total Musk is now claiming. Last year, the Government Accountability Office estimated that “the federal government could lose between $233 billion and $521 billion annually to fraud.” During his address to Congress last month, Trump claimed DOGE already had identified “hundreds of billions of dollars of fraud,” which clearly was not true. Even if you believe DOGE’s numbers (which you shouldn’t), the actual total in this category has to be substantially less than $94 billion—the unitemized share of “estimated savings,” which also includes “asset sales,” “interest savings,” “programmatic changes,” “regulatory savings,” and “workforce reductions.”
Last week, Musk cited one example of fraud that DOGE had identified: “people getting unemployment insurance who haven’t been born yet.” He did not elaborate on exactly how that might work or attach a dollar value to it. But he implied that rooting out “waste and fraud” is easy: “People ask me, ‘Well, how are you going to find waste and fraud in the government?’ And I’m like, ‘Well, actually, just go in any direction. That’s how you find it. It’s just—it’s very common. As the military would say, [it is a] target-rich environment.”
Although that rings true, the task of rooting out “waste and fraud” clearly has proven more difficult than Musk anticipated. It was always implausible that DOGE could “cut the budget deficit in half” simply by insisting on “competence and caring,” as he claimed in February. But even by his own demonstrably unreliable estimation, he is coming up far short of what could be achieved through a serious, sustained effort.
reason.com (Article Sourced Website)
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