Why DOGE Failed

Elon Musk rode into Washington, D.C., with a chainsaw and a big promise: He would cut “at least $2 trillion” in government spending.

Less than four months after President Donald Trump’s second inauguration, Musk is now reportedly scaling back his work with the Department of Government Efficiency (DOGE), the meme-inspired project that Trump authorized to implement Musk’s vision for a leaner, more affordable federal government. Officially, DOGE claims to have cut $170 billion in government spending—though there are some doubts about the validity of that figure—mostly by firing bureaucrats and canceling some pretty silly contracts.

Libertarians and other advocates for limited government have plenty of reasons to applaud those cuts. Given the incentives of federal workers and the tendency of government to only ever get bigger, it’s possible to regard DOGE’s work as a “smashing success”—as Reason‘s Christian Britchgi termed it last month. And even though Musk is on his way out, DOGE’s efforts will continue (reportedly, the new boss plans to target some of the staggering levels of waste in the Pentagon, which would be a very worthwhile project).

Still, $170 billion is plainly not $2 trillion. Why did Musk fall so far short of his budget-cutting goal? Reason asked seven budget policy experts to answer that question, and their answers fell broadly into three categories.

Refusing To Touch Entitlement Spending

“I think they missed a tremendous opportunity,” said Veronique de Rugy, a senior fellow at the Mercatus Center at George Mason University. “DOGE’s top priority should have been to target improper payments and fraud in entitlement programs—particularly Obamacare, Medicaid, and Medicare.”

There’s potential for some huge savings in those areas. The $101.4 billion of improper payments made by Medicare and Medicaid in 2023 accounted for 40 percent of all improper payments across the entire government that year, according to the Government Accountability Office (GAO).

“It is insane not to have started there. Given DOGE’s comparative advantage in data analytics and [information technology], this is where it can have the greatest impact,” said de Rugy. “Cracking down on this waste isn’t just about saving money; it’s about restoring integrity to safety-net programs and protecting taxpayers. And if fixing this problem is not quintessential ‘efficiency,’ what is?”

“Cutting $1 or $2 trillion was never feasible in the first place when 75 percent of spending goes to Social Security, Medicare, Medicaid, defense, veterans’ benefits, and interest [payments on the national debt]—nearly all of which was taken off the table by Trump,” said Jessica Riedl, a senior fellow at the Manhattan Institute and former Senate budget staffer.

Trump campaigned on a promise not to touch Social Security and other entitlement programs, which ruled out much of the work DOGE could have done. Those so-called “mandatory” spending programs constitute the majority of federal spending and most of the expected spending growth in the coming years.

Achieving “the substantial $2 trillion in savings our nation urgently needs, we must address the primary driver of federal debt: unchecked mandatory spending,” said Vance Ginn, who served in the first Trump administration as chief economist in the White House’s Office of Management and Budget.

Misunderstanding How the Federal Budget Works

“DOGE failed because they got the order of operations wrong,” said Ryan Young, a senior economist at the Competitive Enterprise Institute (CEI). 

By targeting the federal payroll before reducing federal agencies’ regulatory powers and eliminating programs, DOGE limited its effectiveness at saving money, Young argued. He pointed to the fact that the federal civilian payroll costs less than $300 billion annually while CEI estimates that the federal regulatory burden is a hidden tax costing well over $1 trillion.

“We’re left instead with the worst of both worlds. Agencies still impose the same heavy regulatory burdens, but in some cases now lack the personnel to administer them. That means delays and paralysis for the private sector, while the quality of governance gets even worse,” he said. “It’s one more example of this administration’s laziness. They go for the quick headline-grabbers, then call it a day.”

“They were more interested in generating easy headlines by defunding small-ball costs like [diversity, equity, and inclusion] contracts, Politico subscriptions, foreign aid, and government employees,” said Riedl. “MAGA voters loved the culture war bait, but that is not where the money is.”

Musk was able to cut costs and reduce the employee headcount when he took over Twitter, and he likely thought a similar approach could work in Washington, said David Ditch, a senior fiscal policy analyst at the Economic Policy Innovation Center. It did not work out that way.

“The federal government is not a business, and the executive branch has very limited authority with respect to spending,” explained Ditch. “While there is tremendous waste and dysfunction within the federal budget, the largest problem is the government doing too many things it shouldn’t and subsidizing nearly everything under the sun. Congress has primary responsibility for the size, scope, and spending of the federal government.”

“Elon Musk had good intentions but failed by misunderstanding that large-scale federal government reform is not a prerogative of the executive,” said Romina Boccia, director of budget and entitlement policy for the Cato Institute. Instead of trying to do everything through the executive branch, DOGE could have put together a package of budget cuts for Congress to consider—like the one that Sen. Rand Paul (R–Ky.) asked Musk to assemble. 

“In an attempt to act unilaterally, DOGE limited itself in scope and sabotaged its own chances of success,” said Boccia. 

“Cancelling non-priority grants and laying off workers only gets you so far, given the federal government primarily funnels money from some to others,” said Ryan Bourne, an economist at the Cato Institute. 

Even when it comes to things the federal government does clearly control, DOGE has done a poor job of constraining spending, said de Rugy. She suggests that DOGE should focus on government subsidies to private businesses and look at wasteful grant programs delivering billions of dollars to state governments.

“They were all over the place, overpromising things they couldn’t deliver on,” said de Rugy. “They had no theory about how to proceed.”

Not Asking for Help

There is no shortage of people in and around Washington who have spent their entire careers studying the federal budget and advocating for cutting spending—including the people quoted in this article. But the Trump administration did not seek much input from the experts who might have pointed DOGE in a more productive direction.

Musk’s team “seemed to believe that technical skills alone could solve entrenched budgetary issues—without doing the homework on how federal spending works or consulting with policy experts who’ve been in the trenches for years,” said de Rugy. “Had they engaged with think tanks and fiscal reformers, they could have built a coherent strategy and better defended their spending cuts.”

Riedl points to how the Trump administration fired inspectors general in several departments—exactly the types of insiders who should have been allies in any serious effort at curtailing waste, fraud, and abuse.

“There is an entire industry of economists, policy wonks, and government auditors who have spent decades identifying wasteful spending and drafting savings blueprints for an ambitious Congress or president to adopt,” said Riedl. “Yet DOGE decided that ‘the swamp’ includes not only Washington’s lobbyists and bureaucrats, but also seemingly anyone with an economics degree and familiarity with the federal budget.”

Or Maybe It Didn’t Fail?

A few of the experts interviewed by Reason pushed back on the idea that Musk’s failure to deliver $2 trillion in budget cuts meant the DOGE project had not been successful in other ways.

“DOGE has sparked a valuable conversation about wasteful spending, and it’s encouraging to see over 20 states, including Texas, follow suit with their own efficiency initiatives,” said Ginn. 

If a rescissions package eventually gets to Congress and is passed, DOGE should be credited with saving billions of dollars of taxpayer money. “In absolute terms, this should be considered a success,” said Ditch. 

Any assessment of DOGE must also consider the counterfactual of what would have happened if it had never been created, argued Bourne.

“Before the election last year, nobody was talking about cutting anything,” he said. Now, the Trump administration has overseen a significant reduction in the size of the federal work force, gutted a few federal agencies, and shifted the conversation about wasteful government spending.

“On the margin, it may still wash out pretty positive,” Bourne said, “relative to the counterfactual where DOGE didn’t exist.”

The post Why DOGE Failed appeared first on Reason.com.

Source: https://reason.com/2025/05/12/why-doge-failed/