The Department of Government Efficiency (DOGE), led by Elon Musk, has been found to significantly overstate the financial savings from its aggressive federal spending cuts.
While DOGE claimed it had saved $55 billion through budget cuts, new analysis suggests the actual savings might be far lower—potentially closer to $2.6 billion over the next year if spending remains unchanged.
These revelations, reported by The Wall Street Journal (WSJ), have raised fresh doubts about the effectiveness of DOGE’s policies, which were initially seen as a cornerstone of President Donald Trump’s efforts to streamline government operations.
Actual Savings Far Below Initial Claims
According to WSJ’s investigation, based on contract data from Deltek, a leading government contracting expert, the bulk of DOGE’s reported savings appear to be overstated:
- $55 billion in claimed savings mostly stemmed from canceled contracts related to Diversity, Equity, and Inclusion (DEI) programs and climate initiatives.
- However, the data shows actual savings might be closer to $2.6 billion, with only 2% of the cuts affecting DEI-related contracts.
- Several contracts that DOGE claimed were canceled had already been partially or fully paid, meaning they didn’t lead to real savings.
One notable example involves defense engineering firm Leidos, which DOGE claimed had a canceled contract with the Social Security Administration that would save $230 million. However, Leidos clarified that its contract is “on contract and ongoing”, directly contradicting DOGE’s claims.
Key Agencies Targeted by Budget Cuts
DOGE’s cost-cutting efforts primarily affected research-oriented government agencies, including:
- The Department of Education
- The Department of Health and Human Services (HHS)
Over $900 million worth of contracts were canceled last year alone, impacting more than 60 agreements with HHS. Despite these high-profile cuts, experts say the actual savings from these canceled contracts are minimal, as many of the agreements had already been fulfilled or partially executed.
Growing Criticism Over Transparency and Effectiveness
The revelations have intensified criticism of DOGE, which has already faced scrutiny for its lack of transparency:
- Last week, DOGE’s official website, meant to provide updates on departmental actions and savings, was found to be completely blank.
- Billionaire entrepreneur Mark Cuban criticized Musk’s management of DOGE, posting on social media, “This says it all.”
Further complicating the situation is the “DOGE Dividend”, a plan endorsed by Trump and Musk to return 20% of the agency’s savings directly to American citizens. Critics, however, question its practicality:
- Erica York, Vice President of Federal Tax Policy at the Tax Foundation, argued that distributing these funds could “reduce the effectiveness of the entire effort.”
- Jessica Riedl, Senior Fellow at the Manhattan Institute, pointed out that with the national deficit nearing $2 trillion, an estimated $4 billion in DOGE savings would equate to just $2.42 per person if evenly distributed.
