Musk's efficiency drive falls short as US federal spending hits record high

Citing data from the Treasury Department, the report states that the federal spending last month stood at $603 billion. This stands in stark contrast to Musk's claim of saving over $100 billion

Department of Government Efficiency (DOGE) chief Elon Musk's hyperactive efficiency drive, which was aimed at curbing federal spending in the US, has fallen short as the spending hits record high, according to a Financial Times report.

 

Citing data from the Treasury Department, the report states that federal spending last month stood at $603 billion. This stands in stark contrast to Musk's claim of saving over $100 billion. However, only a handful of departments reported any decline in their spending in February, the first full month of Donald Trump's administration.

 

The report also highlights the difficulties faced by the Trump administration despite the stringent cost-cutting measures introduced by billionaire Elon Musk.

 

Data findings

 

In the past, Elon Musk has claimed that his department is well-placed to save $1 trillion from the annual budget and has been recognising cuts at a rate of $4 billion per day. However, data revealed restricted progress in bringing down expenses across major spending categories.

 

Comparing federal spending with the same month in 2024, there has been a 7 per cent increase, taking it to $40 billion. This new data comes at a time when President Trump informed members of his cabinet that they are responsible for their departments and not Musk, thereby limiting his authority in terms of firing federal employees.

 

Musk, along with his representatives, infiltrated several government departments, including several arms of the Treasury, as well as the health and state departments. Tens of thousands of workers were suspended, and thousands of contracts and government grants were also cancelled, the report added.

 

The Department of Education was able to cut $6 billion in spending. However, the report suggests that broader cost reductions were overshadowed by increases in other departments. While spending on healthcare rose by three per cent, adding $5 billion to the budget, social security payments saw a six per cent increase, adding $8 billion.

 

The $29 billion spending surge in the Treasury Department is attributed to a $10 billion rise in debt servicing costs and a $14 billion increase in tax credits and related payments. Defence spending, on the other hand, remained steady at $61.4 billion.

 

Despite some reductions, the trend of increasing expenses continues to challenge the DOGE chief's cost-cutting efforts. Taking note of this, Musk announced plans to double the staff and intensify efforts to reduce social security expenditures.

 

The report also suggests that such developments could restrict the impact of Musk's plans. On Tuesday, a bill was narrowly passed by the House of Representatives that "extends current government spending levels until the end of September." The bill has now moved to the Senate, where it would require the support of at least eight Democrats to pass.