Elon Musk’s DOGE Saves $160 Billion But Could Lead To Billions In Hidden Costs For Taxpayers, Warns New Analysis: 'Public...Will End Up Paying For This' - Tesla (NASDAQ:TSLA)

The Department of Government Efficiency (DOGE), spearheaded by Elon Musk, has reportedly saved $160 billion by eliminating wasteful government spending. However, a recent analysis reveals the amount that DOGE’s actions will cost taxpayers.

What Happened: The analysis, conducted by the nonpartisan nonprofit agency, Partnership for Public Service (PSP), includes costs related to paid leave for federal employees, rehiring of wrongly dismissed workers, and lost productivity. It reveals that DOGE costs the taxpayers up to $135 billion this fiscal year, CBS News reported on Friday. This figure does not include the costs of defending multiple lawsuits against DOGE's actions or the estimated loss in tax collections resulting from IRS staff reductions.

PSP’s estimate is derived from the $270 billion in annual federal workforce compensation, factoring in the effects of DOGE’s actions, including costs related to paid leave and declines in productivity.

DOGE has promoted a deferred resignation plan for government workers, enabling many to continue receiving full pay and benefits through September without having to work. After a court ruling, 24,000 government employees who were terminated as part of the reform initiative have been reinstated. Additionally, other agencies have reemployed some workers who had been mistakenly dismissed.

The White House did not immediately respond to Benzinga’s request for comment.

Max Stier, president of the PSP stated, “Ultimately it’s the public that will end up paying for this.” Although the DOGE cuts might lead to long-term savings, Stier warned that they could ultimately raise costs for taxpayers by impacting the broader economy, including reductions in funding for health and science research.

Why It Matters: The DOGE initiative has been under scrutiny since its inception. In April 2025, DOGE announced it had uncovered $382 million in fraudulent unemployment insurance claims, a revelation that was met with skepticism as experts argued these claims had already been investigated.

Later that month, Musk announced he would be reducing his time commitment to DOGE to focus on Tesla Inc. TSLA, causing the automaker’s stock to surge nearly 24% in five days. This shift in focus raised questions about the future of DOGE and its ability to deliver on its promises.

Meanwhile, Donald Trump’s AI and crypto czar, David Sacks clarified that Musk isn’t completely distancing himself from DOGE, but is instead refining his focus to better manage his numerous commitments.

Despite the criticism, the White House defended DOGE’s actions, with spokesman Harrison Fields stating that the American public supports the president’s mission to make government more efficient.