Elon Musk’s DOGE claims $160 billion in savings, but new report warns it could end up costing taxpayers $135 billion instead

Tech billionaire Elon Musk's Department of Government Efficiency's (DOGE) ambitious bid to eliminate waste and corruption from the US government, is coming under increasing fire after new analysis showed the savings would actually end up costing taxpayers, as per a report.

While DOGE has claimed it has saved $160 billion because of its reforms, a nonpartisan study organization found that the cost of the actions at an estimated $135 billion for this year's budget, as per CBS News.

The study, prepared by the Partnership for Public Service (PSP), highlights the unforeseen effects of DOGE's drastic reductions and efficiency efforts. PSP's calculation takes into account the fiscal effect of placing tens of thousands of federal workers on paid leave, rehiring employees who were suddenly dismissed, and the overall loss in productivity, according to the report.

A Costly Reform

DOGE has sought to cut federal expenditures by inducing government workers to take deferred resignations, which enable them to earn full pay and benefits without working, as per CBS News. Additionally, more than 24,000 workers were terminated as part of these reforms, although many have since been rehired following legal appeals, according to the report.

President of the Partnership for Public Service, Max Stier said, "We haven't seen much focus on the waste [DOGE] is creating. This is an effort that was created to address waste, but we were seeing the opposite," quoted CBS News.

Stier also mentioned that "Ultimately it's the public that will end up paying for this," adding that he expects the taxpayer's costs to grow after other DOGE cuts take effect, reported CBS News.

The White House Defends DOGE's Efforts

The White House has pushed back on the criticism. A White House spokesperson, Harrison Fields argued, "The continued attempts to sow doubt in the massive accomplishments of this never-before-seen effort to make government more efficient speaks more about the illegitimacy of those peddling these falsehoods than good work of DOGE," as quoted in the report. Fields added, "The American public are in lockstep with the president's mission and will not be swayed by more lies coming from the legacy media," quoted CBS News.

The IRS Cuts and the Impact on Tax Revenue

One of the most significant impacts of DOGE's cuts could come from reductions at the IRS. The agency, which is planning to slash about 40% of its workforce, is expected to lose significant tax revenue as a result, as per the report. Estimates from the Yale Budget Lab suggest the IRS cuts could result in a $323 billion loss in tax revenue over the next decade due to decreased audits and lower tax compliance, reported CBS News.

While DOGE's efforts might pay off in the long term, like potentially saving $38 billion over the next 10 years through the layoffs, as per the report.

However, Stier highlighted that the costs for taxpayers could grow as they ripple through the economy, such as reductions in funding of health and science research could lead to an estimated $16 billion annual economic loss and the loss of 68,000 jobs, as per CBS News.

FAQs

How much has DOGE claimed to save?
DOGE claims to have saved $160 billion through its cost-cutting measures.

How much have these actions cost taxpayers?
The PSP estimates that these actions will cost taxpayers around $135 billion this year, considering lost productivity, rehiring costs, and other administrative expenses.