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U.S. News
29 September 2025

Elon Musk’s Cost-Cutting At DOGE Sparks Federal Turmoil

Sweeping layoffs, legal battles, and urgent rehiring efforts reveal deep divisions over Musk’s reforms and the future of federal agencies.

In a year already marked by fierce debates over government spending and the future of federal agencies, the Department of Government Efficiency (DOGE), helmed by Elon Musk and his veteran cost-cutter Steve Davis, has become the focal point of a sweeping campaign to slash federal expenditures. The repercussions of these drastic measures are rippling across Washington, prompting both operational crises and legal challenges, as agencies scramble to adapt to a new era of austerity and accountability.

According to Berawang News, tensions reached a boiling point on September 29, 2025, when top Trump official and White House budget director Russell Vought was reported to have reacted furiously to Musk’s aggressive cost-cutting under DOGE. Vought, a key architect of the Project 2025 playbook for a potential second Trump administration, found his own plans for federal reform upended by Musk’s brief but sweeping reforms. The New Republic reported that Vought’s frustration stemmed from Musk’s initiatives affecting programs he intended to preserve, as well as Musk’s now-infamous email to federal employees demanding they list five weekly accomplishments—a move Vought saw as bypassing established personnel procedures and exposing the government to liability.

“We’re going to let DOGE break things, and we’ll pick up the pieces later,” Vought told his staff, according to three sources cited by The New York Times. This sentiment echoed throughout the administration, as agency heads bristled at what they viewed as heavy-handed oversight and an erosion of traditional bureaucratic norms. Vought’s irritation reached new heights when Musk moved to eliminate the Department of Education’s data office. Two sources told The New Republic that Vought had hoped to use the office’s data to undermine programs supporting Black and brown students, as well as those with disabilities or from poor backgrounds. Vought’s spokesperson, Rachel Cauley, denied the more inflammatory accusations but acknowledged that her boss was "annoyed by the billionaire bureaucrat."

Meanwhile, the impact of DOGE’s efficiency drive was being felt most acutely within the General Services Administration (GSA). In early 2025, the GSA became one of the primary targets of Musk’s cost-cutting blitz, leading to thousands of layoffs, forced resignations, and early retirements, as detailed by the Associated Press. The cuts were part of a broader strategy that ultimately affected more than 201,000 federal employees since Donald Trump returned to office—a staggering number by any measure. The rationale was straightforward: save taxpayer dollars. Indeed, the initial layoffs were projected to save approximately $206 billion, or $1,279.50 per taxpayer. But the fallout was immediate, as operational deficiencies began to mount and the agency’s ability to deliver essential services came under threat.

By late September, the GSA was forced to pivot. According to Reuters, the agency began efforts to rehire hundreds of former employees, extending offers with a tight deadline for acceptance and a return-to-work date of October 6, 2025. This move was not unique to the GSA; other agencies such as the IRS, Department of Labor, and National Park Service were also scrambling to bring back staff who had been let go during the DOGE purge. Yet even as the GSA sought to rebuild its workforce, the agency announced another round of layoffs—this time targeting 126 employees from the Public Buildings Service. As a GSA spokesperson put it, the agency was “making adjustments” to its staffing, signaling that elements of Musk’s efficiency strategy were still firmly in place.

At the heart of these changes was Steve Davis, Musk’s trusted lieutenant and the man responsible for some of the most aggressive job cuts at Twitter and SpaceX. According to Los Angeles Times coverage cited in the reporting, Davis had built a reputation for frugality that bordered on legendary—signing off on expenses as low as a few hundred dollars and even sleeping at Twitter headquarters with his partner and newborn while overseeing layoffs. When Musk tapped him to oversee hiring for DOGE, shock waves rippled through Washington. Davis wasted no time: on September 22, 2025, DOGE slashed about $900 million in Education Department contracts, targeting 90 contracts at the Institute of Education Sciences. The department was quick to clarify that core operations, such as the NAEP exam and College Scorecard, would remain unaffected.

But the cost-cutting crusade soon drew sharp criticism. DOGE faced allegations of overreach after the Trump administration granted Musk’s department access to federal systems containing personal data on tens of millions of Americans—without their consent. On September 29, 2025, a coalition of labor unions filed a lawsuit in federal court, accusing the administration of violating the Privacy Act by giving DOGE access to sensitive data at the Education Department, Treasury Department, and Office of Personnel Management. The suit contends that DOGE was using student loan data not for its intended purpose, but “for purposes of destroying” the Education Department itself. This legal battle is likely to test the limits of executive authority and the protections afforded to private information under federal law.

As the government funding deadline loomed, Vought took a more aggressive stance. According to The New Republic, the White House Office of Management and Budget wrote to Congress urging passage of a short-term measure to keep the government open through November. If lawmakers failed to act, Vought’s office warned agencies to brace for another wave of mass firings—this time targeting positions defunded or misaligned with Trump’s agenda. The specter of a shutdown added urgency to ongoing debates over the future of federal spending and the role of the administrative state.

On the other side of the aisle, Democrats were working feverishly to preserve tax credits from the Affordable Care Act, set to expire at the end of 2025. The stakes couldn’t be higher: the Congressional Budget Office estimates that 5.1 million Americans would lose their insurance by 2034 if funding lapses. For many, the debate over efficiency versus essential services is more than an academic question—it’s a matter of health, livelihood, and basic security.

The saga of DOGE’s reforms is far from over. As agencies like the GSA navigate the delicate balance between cost-cutting and operational effectiveness, and as legal battles over privacy and executive authority heat up, Washington remains on edge. The coming weeks will likely determine not only the fate of thousands of federal workers but also the trajectory of American governance in an era defined by disruption and uncertainty.

In the end, the story unfolding in the nation’s capital is a testament to the complexities of government reform: bold ideas and big savings can bring unintended consequences, and the quest for efficiency often collides with the realities of public service and the rule of law.