Billions in savings, or billions in losses? Elon Musk's DOGE initiative promised to revolutionize government efficiency, but the numbers tell a different story. As mass layoffs and bureaucratic chaos grip federal agencies, experts warn that the true cost may dwarf any potential gains, leaving taxpayers to foot the bill.
Elon Musk’s appointment to lead the Department of Government Efficiency (DOGE) under President Trump’s second term came with ambitious promises of rooting out waste, fraud, and abuse. Initially touting potential savings in the trillions, Musk later revised that figure down to $150 billion. However, a growing chorus of federal workforce and policy experts is now suggesting that DOGE’s aggressive cost-cutting, primarily through mass federal workforce reductions, may be backfiring. Potentially costing taxpayers billions of dollars this fiscal year alone.
While DOGE claims $150 million in savings, critics argue that the sheer scale and chaotic nature of personnel changes, including firings, buyouts, and early retirements impacting over 260,000 federal workers – have significantly hampered productivity. Max Stier, CEO of the Partnership for Public Service, a non-profit focused on government efficiency, believes the costs associated with this upheaval, alongside the dip in output, could amount to roughly half of the federal government’s $270 billion annual payroll. This translates to a staggering $135 billion in potential losses this fiscal year alone.
A particularly concerning area is the Internal Revenue Service (IRS). Reports indicate that up to a third of its 100,000-strong workforce could depart. With approximately 22,000 potentially taking recent resignation offers. The Yale University Budget Lab estimates that a loss of this magnitude could lead to an $8.5 billion reduction in net revenue in 2026 due to fewer personnel available for crucial tax audits. Over a decade, this revenue shortfall could balloon to nearly $198 billion. As Richard Prisinzano, Director of Policy Analysis at The Budget Lab, aptly put it, “For every dollar spent [on IRS personnel], there’s quite a bit of revenue that comes in.” Cutting staff, therefore, directly impacts the government’s ability to collect vital funds.
Adding to the skepticism surrounding DOGE’s claims is evidence suggesting that the reported $150 million in savings may be significantly overstated. Some calculations reportedly included savings from already expired contracts, raising serious questions about the accuracy of DOGE’s accounting. Experts like Harry Kraemer from Northwestern University’s Kellogg School of Management suggest that the claimed savings could be inflated by as much as 80%.
Furthermore, these savings calculations fail to account for the indirect costs associated with DOGE’s methods. The “chaos” within agencies, as described by experts, leads to lost productivity. Even seemingly minor initiatives, like Musk’s weekly emails requesting employees to list accomplishments, are estimated to cost the federal workforce a collective 165,000 hours per week.
The push for greater efficiency in government is not solely a federal phenomenon. In California, Governor Gavin Newsom recently ordered state employees back to the office at least four days a week. Ending a prolonged period of remote work that began with the COVID-19 pandemic. This move, however, has been met with resistance from labor unions and raised questions about the true impact of remote work on productivity and taxpayer costs. Similar to the debates surrounding the DOGE-driven federal workforce reductions. The California situation highlights the complexities of balancing efficiency goals with employee needs and the potential for unintended consequences. For instance, past reports of significant overstaffing in some California state departments raise questions about the baseline efficiency levels prior to and after the shift to remote work. Mirroring the federal concerns about the value of lost labor. The resistance from California’s public employee unions to returning to the office also echoes potential morale and productivity impacts within the federal workforce facing job losses and significant organizational changes under DOGE.
Beyond the immediate financial implications at the federal level, there are concerns about the long-term health and effectiveness of the workforce. Russell Vought, former director of the Office of Management and Budget, openly spoke about wanting to put bureaucrats in “trauma.” Experts like Max Stier argue that this deliberate “traumatization” of the workforce is counterproductive, leading to decreased morale and productivity.
Moreover, the abrupt and widespread firings, including probationary employees and specialists in critical areas like nuclear security and public health, raise serious concerns about the government’s ability to function effectively and retain talent. The costs associated with recruiting, hiring, and training these specialized roles, sometimes exceeding $1 million per employee, are being wasted as these individuals are let go.
DOGE’s actions have also triggered a wave of legal challenges, with at least 30 lawsuits and appeals related to Trump’s agenda implicating the department. The costs of defending these actions in court are yet another unquantified expense for taxpayers. Experts like Jeri Buchholz, a veteran of public service hiring and firing, suggest that while workforce reduction is a legitimate goal, DOGE’s “lightning-speed, blunt-force” methods are legally questionable and could lead to prolonged and costly legal battles. President Trump’s contrasting swift reversal of federal remote work policies further underscores the varying approaches and potential legal ramifications of different efficiency-focused mandates.
While there is a general consensus that government efficiency needs improvement, experts argue that DOGE’s approach has been misguided. Existing federal law and past government shutdowns offered legal and more strategic pathways for workforce reduction that could have minimized disruption and cost. Instead, DOGE appears to have prioritized speed and scale over strategic planning and legal compliance.
As Elon Musk prepares to step back from his role at DOGE, the true cost of his efficiency drive is becoming increasingly apparent. While the promised “DOGE dividend” for taxpayers seems increasingly unlikely. The potential for billions in lost productivity, revenue, and the long-term damage to the federal workforce paint a concerning picture for the American public, who will ultimately bear the financial burden.
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