Elon Musk's Government Efficiency Push Falls Short As Treasury Data Shows Spending Up Sharply Since Trump's Inauguration: Report

Despite aggressive cost-cutting by the Department of Government Efficiency, federal spending has reportedly climbed by $154 billion since President Donald Trump returned to office,

What Happened: Government spending is significantly higher under Trump's second term compared to the same period in 2024 under President Joe Biden, according to the analysis by the Wall Street Journal, citing the Treasury Department’s daily financial statements.

The increase—$154 billion—comes even as the Department of Government Efficiency (DOGE), led by Elon Musk, touts $150 billion in cost savings through job cuts, contract terminations, and the rollback of diversity and aid programs.

“I’m excited to announce that we anticipate savings in ’26 from reduction of waste and fraud by $150 billion,” Musk said during Thursday’s cabinet meeting, referring to the period from October 2025 to September 2026.

Most of the spending increase is driven by mandatory obligations like Social Security, Medicare, Medicaid, and ballooning interest payments on the national debt.

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Social Security costs alone are up $32.7 billion, fueled by 1.3 million new beneficiaries and a 2.5% cost-of-living adjustment.

Medicare and Medicaid spending has risen another $29 billion since Jan. 20 due to enrollment growth and rising healthcare costs.

Meanwhile, interest payments on the national debt have soared by $25.5 billion, a result of higher interest rates and increasing federal borrowing.

Musk, who has warned that interest costs could eventually consume the entire federal budget, has made trimming government inefficiencies a top DOGE priority—but the numbers so far suggest minimal bottom-line impact, the report said.

"I think the net effect of DOGE on federal spending, at least insofar as we can track it in the daily Treasury statement, has been pretty small," said Don Schneider, deputy head of U.S. policy at Piper Sandler, according to the report.

"It will take time for those savings to accumulate, but it will also be dependent on the administration prevailing in court over some of these actions."

Why It Matters: The data complicates the administration's messaging around fiscal responsibility. While Musk and DOGE have aggressively cut thousands of federal jobs, ended diversity programs, and sought to scale back foreign aid, these efforts have been met with legal setbacks and limited short-term savings.

Litigation over the firing of 25,000 probationary employees is ongoing, and some of those workers have been reinstated. Foreign aid cuts were temporarily blocked by the Supreme Court in March, and spending has since rebounded to near-2024 levels.

DOGE has seen small wins—like a $4 billion drop in Education Department spending and cost delays at the TSA—but these have yet to materially shift overall expenditures.

In fact, federal salary payments are $2.8 billion higher than a year ago, partly due to a 2% raise approved under Biden and ongoing payments to employees who accepted buyouts.

Bank of America (BofA) Securities previously suggested that DOGE may be exaggerating its reported savings from canceled or renegotiated contracts. As of March 30, DOGE claimed it had saved around $24.8 billion—up from $21.6 billion the previous week—through these efforts.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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