Elon Musk's Department of Government Efficiency, known as DOGE, claims to have saved $160 billion through its initiatives aimed at eliminating wasteful or fraudulent government spending. However, a recent analysis from the Partnership for Public Service (PSP), a nonpartisan research and advocacy group, suggests that these efforts might come with a hefty price tag for taxpayers, estimating costs associated with DOGE's actions at $135 billion for the current fiscal year.
The PSP's analysis focuses on the financial repercussions of placing tens of thousands of federal employees on paid leave, rehiring mistakenly terminated workers, and the overall loss of productivity. This estimate is derived from the annual compensation costs of the federal workforce, which total approximately $270 billion. Notably, the projected $135 billion cost does not account for the expenses related to defending against numerous lawsuits challenging DOGE's actions or the anticipated loss of tax revenue due to staff cuts at the IRS.
In an effort to streamline operations, DOGE encouraged government workers to participate in a Deferred Resignation Program (DRP), allowing many to maintain full pay and benefits through September without working. As a result, around 24,000 federal employees who were dismissed during the reform efforts have since been rehired. This has led to significant productivity losses, with federal workers now tasked with documenting their work, further compounding the inefficiencies.
Max Stier, president of the Partnership for Public Service, expressed concern over the unintended consequences of DOGE's reforms. "We haven't seen much focus on the waste DOGE is creating," he remarked in an interview with CBS MoneyWatch. "This is an effort that was created to address waste, but we were seeing the opposite." He anticipates that taxpayer costs will continue to rise as more DOGE cuts take effect.
The White House has pushed back against the PSP's analysis, with spokesman Harrison Fields asserting that the claims undermine the accomplishments of DOGE. He stated, "The American public are in lockstep with the president's mission and will not be swayed by more lies coming from the legacy media."
Amidst these controversies, the IRS is projected to lose approximately $323 billion in tax revenue over the next decade due to reduced tax compliance and fewer audits resulting from staffing cuts. While there is potential for long-term savings from the layoffs—estimated at $38 billion over ten years—Stier warns that the economic ripple effects could lead to further taxpayer burdens, including cuts to health and science research that could cost an estimated $16 billion annually and result in the loss of 68,000 jobs.
Despite DOGE's claims of savings, scrutiny has emerged regarding the accuracy of these figures. Critics have pointed out that the reported $160 billion in savings falls short of Musk's ambitious goal of reducing annual government spending by $2 trillion, roughly one-third of the federal budget. Many experts believe that achieving such a target would require drastic cuts to major federal programs like Social Security and Medicare, which have been politically protected.
In a recent earnings call, Musk announced plans to reduce his involvement with DOGE starting in May 2025, citing challenges faced by Tesla, his electric vehicle company, which has seen a dramatic 71% decline in profits and a 20% drop in vehicle sales. However, he intends to continue dedicating one to two days a week to DOGE, emphasizing the importance of maintaining focus on eliminating government waste.
Meanwhile, some federal agencies are grappling with the fallout from workforce reductions. The Agriculture Department has begun contingency planning for critical functions, including avian influenza response, as staff shortages threaten to disrupt essential operations. Employees involved in these efforts have reported that the agency is asking those who opted into the DRP to reconsider their decisions, as the potential for work stoppages looms large.
Approximately 16,000 employees have accepted the DRP, which allows them to remain on paid leave until September 30, 2025. However, the Agriculture Department's Animal and Plant Health Inspection Service (APHIS) is facing significant staffing losses, with half of its quality assurance staff already gone. The agency is now seeking to reassign employees from other areas or pause programs to mitigate the impact of these cuts.
As the situation unfolds, the Health and Human Services Department (HHS) is also calling back laid-off employees to maintain critical functions, despite informing them that their jobs will eventually be eliminated. HHS Secretary Robert F. Kennedy Jr. acknowledged that some layoffs were made in error and indicated that around 25% of affected staff might be reinstated. However, the actual scale of reinstatement remains uncertain.
The Social Security Administration (SSA) is likewise feeling the strain of workforce reductions, with plans to cut approximately 12% of its workforce—about 7,000 jobs. This has resulted in over 2,500 employees taking buyouts, significantly impacting field offices that serve as the primary point of contact for millions of Americans. Reports indicate that some offices have lost more than 58% of their staff, leading to longer wait times for services.
As the SSA struggles with increased call volumes—10.4 million calls were received last month, up from 6.5 million in November—employees report feeling overwhelmed and burned out. LaPointe, a field office worker, described the chaos and confusion surrounding Social Security services, highlighting that the reduction in staff equates to a reduction in service quality.
Despite the Trump administration's assurances that Social Security benefits will not be cut, advocates argue that the staff reductions effectively amount to service cuts, as delays in processing claims can deny benefits to those in need. The SSA's own performance data reveals a significant increase in wait times for phone services, rising from an average of one hour last year to over an hour and a half this year.
As agencies navigate the complexities of workforce optimization and budget constraints, the long-term effects of these cuts on public services and employee morale remain to be seen. With critical functions at risk and a workforce stretched thin, the challenges ahead for federal agencies are daunting.
