In its early days, the Elon Musk-led Division of Authorities Effectivity (DOGE) bragged it might reduce as much as $2 trillion from the U.S. federal funds. In December, Musk conceded the particular advisory solely saved $200 billion in “zombie payments” for cancelled contracts or fraudulent unemployment claims.
However a latest estimation of DOGE’s total affect indicated any financial savings it discovered did little, if something, for the deficit.
In a deposition video from January, which lately went viral, DOGE worker Nate Cavanaugh mentioned cost-cutting efforts fell far in need of its unique $2 trillion purpose. The deposition was half of a bigger lawsuit filed by the American Council of Realized Societies, a nonprofit consortium of scholarly establishments, alleging DOGE used OpenAI’s ChatGPT to establish after which cancel greater than $100 million in range, fairness, and inclusion grants.
“You don’t regret that people might have lost important income…to support their lives?” one lawyer requested Cavanaugh concerning the grant cancellations.
“No. I think it was more important to reduce the federal deficit from $2 trillion to close to zero,” mentioned Cavanaugh, who can be the founding father of AI-powered accounting agency Move Finance.
“Did you reduce the federal deficit?” the lawyer requested.
“No, we didn’t,” Cavanaugh replied.
The White Home didn’t instantly reply to Fortune’s request for remark.
Decide Colleen McMahon of the Federal District Courtroom in Manhattan ordered movies of the deposition, which additionally included a deposition of DOGE staffer Justin Fox, to be eliminated on-line following social media backlash.
DOGE, fashioned the primary day of President Donald Trump’s second time period, was a part of an effort to root out so-called “waste, fraud, and abuse” from the federal authorities. Over the course of the ten months it was working beneath centralized management, the group eradicated the roles of greater than 300,000 federal staff and claimed to have canceled 13,440 contracts.
The latest lawsuit is the newest occasion of DOGE coming beneath scrutiny. Cybersecurity specialists warned the group had entry to U.S. payroll programs that introduced “unprecedented power and control” over Individuals’ info, whereas the mass layoffs might have created alternatives for international locations like China and Russia to recruit informants who had entry to labeled information. Administration specialists claimed DOGE’s purported financial savings have been utterly overblown.
Indicators of DOGE rising U.S. authorities spending
From the start of Musk’s tenure as head of DOGE, which was not an actual division however as a substitute an advisory workplace, economists have been skeptical about its skill to slash the federal deficit because the nationwide debt soared past $38 trillion. The Brookings Establishment Hamilton Mission instrument monitoring federal spending discovered that as of Dec. 19, 2025, authorities spending elevated almost 6% to $7.558 trillion from $7.135 trillion a 12 months earlier.
A Cato Institute report from December 2025 argued DOGE’s failure to shrink total spending, regardless of culling greater than 9% of the federal workforce, was partly as a result of most federal spending doesn’t come from salaries. Moreover, the federal government employed contractors to exchange staff. The libertarian suppose tank calculated {that a} 10% reduce within the workforce would end in a financial savings of solely about $40 billion.
Max Stier, chief govt of presidency effectivity and workforce nonprofit Partnership for Public Service, advised Fortune in April 2025 that DOGE’s cuts might really mount stress on America’s coffers, estimating the fee to fireplace, rehire, and put employees on paid depart price American taxpayers roughly $135 billion.
“We do need to have our government work better, but the approaches that have been adopted so far are taking us in the exact wrong direction,” Stier mentioned. “The end result will be that the American public will be holding the bag as Elon Musk goes back to his private enterprises.”
A Yale College Price range Lab report from March 2025 equally forecasted that if 22,000 Inner Income Service staff left their roles, the company would lose $8.5 billion in income in 2026 on account of fewer personnel obtainable to conduct audits. Over a decade, that loss might snowball to almost $198 billion in misplaced income. (The U.S. Authorities Accountability Workplace reported that greater than 17,000 IRS staff left the company final 12 months.)
An IRS worker beforehand advised Fortune the mass layoffs have decreased the effectivity of staff, rising name occasions and slowing down the processing of paperwork.
“When we look back historically, we’re going to see that the gutting of the bureaucracy that keeps the government running, that keeps the country functional, will be the trigger that collapses America,” the worker mentioned.
Scott Kupor, the top of the Workplace of Personnel Administration, indicated the workforce reductions final 12 months have been overdone. He advised The Washington Publish earlier this month the administration is planning to rehire a number of positions within the 2 million-person federal workforce.
“We probably have some skills that we now need to hire back, quite frankly,” Kupor mentioned. “There’s no question anytime you do restructurings … sometimes you over-restructure, sometimes you under-restructure.”
