The Department of Government Efficiency (DOGE), launched by Elon Musk, has claimed substantial savings of $55 billion through various actions, including layoffs and contract cancellations. Yet, analysis reveals these figures are likely overstated, raising considerable skepticism among experts and the public alike.
According to data published by DOGE, approximately $7.2 billion of this total was purportedly saved through the cancellation of 1,125 contracts. This figure appears impressive at first glance; nevertheless, subsequent investigations—most prominently by the Washington Post—have unveiled serious flaws within this financial narrative. The analysis indicated many of these canceled contracts were already fulfilled before the cancellations, meaning no actual savings were realized. Specifically, 417 of the listed contracts generated zero savings, and 51 contracts collectively accounted for less than $1 million.
Since the data went live, DOGE has revised its savings figure downward, cutting nearly $9.3 billion. A significant error involved labeling a management consulting contract with the U.S. Immigration and Customs Enforcement (ICE) as worth $8 billion, only to later correct the amount to $8 million, as initially reported by the New York Times. DOGE maintains it has always cited the accurate number but faced scrutiny over its credibility.
Further complicity arose from the categorization of savings from indefinite delivery vehicles (IDVs). At least $1.35 billion of the claimed savings stemmed from these contracts, which are agreements listing maximum amounts but seldom see the government obligated for their full values. Steve Kelman, a Harvard Kennedy School professor, explained, "For the vast majority of these contracts, certainly in the first few years, you don’t spend the whole amount; and for some of them, you never spend the whole amount." This assertion calls the entirety of DOGE's savings claims, and their calculation methods, heavily under question.
Besides contract cancellations, DOGE also claimed $144 million from renegotiated leases. Here too, skepticism lurked. While DOGE emphasized savings from 20 leases, analysis indicated these agreements were already slated to expire within two years, making the top-line figures misleading, if not entirely speculative. For example, one lease concerning the Bureau of Labor Statistics was reported as saving $7.1 million, but plans for its relocation were well-known well before DOGE issued its claims.
On social media, investment firm founder James Fishback propounded on the notion of distributing the alleged savings to American households, penciling out about $5,000 per taxpaying family. This idea seemed to catch the ear of President Trump, who remarked, "I love it," prompting discussions about the feasibility and economic ramifications.
Economists, including those advocating for this proposal, caution about potential inflationary impacts. The conversation surrounding tax rebate checks likens them to those issued during the pandemic, which have been blamed for triggering inflation rates not seen for four decades. If the DOGE’s savings were used for checks, those within the fiscal industry assert it might boost consumer spending but also lead to price increases.
Trump and his supporters seem to advocate for the distribution of savings, arguing it would empower citizens to report wasteful government spending. Yet the fundamental question remains: Can DOGE even deliver on its promised savings? Douglas Elmendorf, former director of the Congressional Budget Office, noted, "Only a small share of total spending goes to federal employees. The big money is in federal benefits, and those are not within DOGE’s purview." This assessment paints a stark picture of the challenges DOGE faces, as it cannot merely trim the workforce appreciably enough to make significant fiscal changes.
A notable refrain from budget experts expresses doubt over the overall efficacy of DOGE’s approach. Many have witnessed previous efforts to eliminate government waste yield meager results; initiatives to curtail “waste, fraud, and abuse” have often encountered substantial obstacles. A White House official, supporting DOGE's methodology, suggested savings estimates rely on potential contract liabilities rather than actual expenditure.
Meanwhile, critics raised eyebrows at the real credibility of reported savings. Elaine Kamarck of the Brookings Institution remarked, "There's no money there, and certainly not enough money to make a significant contribution to taxpayers," pointing to the gap between public expectations and the reality of DOGE's finances.
Overall, the question of whether DOGE can substantiate its savings claims, let alone return any to taxpayers, remains unresolved as experts continue to call for clarity and evidence. The skepticism surrounding the inflated figures demonstrates the need for transparent and accurate reporting on federal spending and efficiency measures to uphold public trust and accountability.