Federal government spending is up by $154 billion — over 7 percent — so far this year, reports the Wall Street Journal:
A Wall Street Journal analysis of daily financial statements issued by the Treasury Department found government spending since the inauguration is $154 billion more than in the same period in 2024 during the administration of President Joe Biden.
DOGE claims cuts of $150 billion so far, but the Journal analysis found those efforts have yet to affect the bottom line….
Last fiscal year, about 73% of federal spending went to interest on the debt and mandatory programs like Social Security and Medicare that operate on autopilot. That amounted to $4.9 trillion.
This year Social Security payments are $32.7 billion higher since Trump took office. The increased costs are driven mainly by nearly 1.3 million new beneficiaries in the past year and a mandated 2.5% cost-of-living adjustment. DOGE says it is rooting out fraudulent claims and cutting staff, but Trump has promised to leave benefits untouched.
Medicare and Medicaid spending are similarly outpacing levels from a year ago, growing by about $29 billion since the inauguration. Increased enrollments and rising healthcare costs are helping fuel this growth. Combined, Social Security, Medicare and Medicaid accounted for roughly 43% of federal spending in the last fiscal year.
Rounding out the mandatory spending increases is the rapidly growing cost of interest on the national debt, which DOGE chief Elon Musk says could eventually consume the entire federal budget if unchecked.
The U.S. has paid out $25.5 billion more in interest since Trump returned to the White House than in the same period in 2024. Rising interest rates and a growing national debt contribute to higher interest costs.
DOGE launched its cost-cutting with a shock-and-awe campaign terminating at least 25,000 probationary federal workers and slashing funds for foreign aid. Some laid-off government workers have gotten their jobs back, and the termination of probationary employees is currently being litigated….Similarly, the administration’s efforts to curb U.S. Agency for International Development costs hit roadblocks. At first, spending was dramatically cut, the Treasury checkbook shows. In March, however, the Supreme Court rejected the administration’s emergency request to delay foreign-aid payouts, and in recent weeks spending has nearly returned to 2024 levels.
The federal government has paid $2.8 billion more in salary to government employees this year than last year, partly due to a 2% across-the-board pay raise approved by Joe Biden before he left office. Thousands of federal employees took buyout offers, but they get to collect their salaries until September.
Even if DOGE’s cuts to the U.S. Agency for International development had been left in place, they would not have kept federal spending from rising. The U.S. spent $22 billion on US AID in 2024.
The buyout offers may actually increase salary costs this year, argues Martha Gimbel of the Yale Budget Lab. Some government employees who had already planned to leave the government or retire may have instead accepted a buyout and thus are staying on the government payroll until September.
Some of DOGE’s cuts will increase the budget deficit by reducing revenue collection and increasing tax evasion. Elliott Morris says, “The Washington Post reported this week that DOGE-enforced cuts at the IRS will cost us all $500 billion in lost tax income, or about 10% of federal tax revenues. That’s primarily because of staff and other tech cuts, as well as the reorientation of some organizational progress to data-sharing instead of enforcement for tax cheats. For those keeping score, that is nearly 4 times the total savings DOGE claims on its website (itself a likely overestimate).”
Trump administration officials dispute that $500 billion revenue loss, saying the loss will be much smaller. But even if only $150 billion in tax revenue is lost due to the Trump administration firing lots of IRS employees, that would fully offset the $150 billion in spending cuts that Elon Musk now expects DOGE to achieve. So DOGE may not cut the budget deficit at all, even if DOGE manages to cut the $150 billion in federal spending that Musk anticipates cutting.
Elon Musk said he anticipates the Department of Government Efficiency‘s efforts to slash “waste and fraud” from the federal government will cut $150 billion in spending over the next fiscal year, appearing to dramatically lower much-loftier projections he previously touted.
Musk, the billionaire tech entrepreneur who oversees DOGE, provided the update during an April 10 Cabinet meeting convened by President Donald Trump.
“I’m excited to announce that we anticipate savings in FY 26 from reduction of waste and fraud by $150 billion,” Musk, seated at a table with Cabinet secretaries, told Trump….The 2026 fiscal year runs from Oct. 1, 2025 to Sept. 30, 2026.
While campaigning for Trump during the 2024 presidential race, Musk talked about cutting $2 trillion from the government. He lowered the goal to $1 trillion after Trump assumed office. And as recently as a March 27 interview on Fox News, Musk said he was on pace to eliminate $1 trillion in federal spending by the end of May.
Former IRS Commissioner Chuck Rettig — who was appointed by President Trump in his first administration — criticized the DOGE layoffs of large numbers of IRS employees, saying those layoffs would lead to more tax evasion, and result in cheaters benefiting at the expense of honest taxpayers, who will end up paying higher taxes in the future to make up for taxes not paid by tax evaders. (Tax evasion increases the national debt, which they increases the size of the federal budget deficit by increasing interest on the national debt. That results in slower economic growth by crowding out productive private investment. The increased interest payments often end up being paid by increasing tax rates, which harms law-abiding taxpayers.)
