Musk’s cuts fail to stop US federal spending hitting new record

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Elon Musk’s hyperactive efficiency drive failed to prevent US federal spending rising to a record $603bn last month, new Treasury data has revealed, highlighting the Trump administration’s difficulty in cutting the size of government.

Musk’s so-called Department of Government Efficiency claims to have already made more than $100bn of savings but only a handful of departments registered any decreases in the first full month of the new administration.

Spending rose by $40bn compared with the same month last year on a like-for-like basis, a 7 per cent increase.

The new data comes after Musk and his emissaries at Doge have infiltrated several government agencies, including the state and health departments, and various arms of the Treasury. Tens of thousands of workers have been suspended or dismissed and thousands of government grants and contracts have been cancelled.

Musk has repeatedly claimed that Doge is on track to make $1tn worth of savings from the annual federal budget, and said the initiative was currently identifying cuts at a rate of $4bn a day.

But the Monthly Treasury Statement for February showed that few large categories had achieved significant decreases. The Department of Education had cut outgoings by $6bn, Treasury officials noted.

The officials referred further questions on spending cuts to Doge. A representative for Doge did not immediately respond to a request for comment on the monthly figures.

“Doge savings are so small as not to be identifiable in monthly spending totals,” said Jessica Riedl, an economic policy expert at the conservative Manhattan Institute think-tank, who has been analysing the initiative’s efforts.

The new figures also illustrate the challenge in making any impact by concentrating on cuts that can gain the broad support of Republican lawmakers.

Marco Rubio, the secretary of state, oversaw a cut in spending at the US Agency for International Development, whose monthly outlay was revealed to have been halved to $226mn, compared with $547mn in the same month last year.

However, this saving was dwarfed by the consequences of a mere 3 per cent rise in monthly healthcare spending, which cost an additional $5bn. A 6 per cent rise in social security outlays cost an additional $8bn.

“Some 75 per cent of all federal spending goes to social security, Medicaid, Medicare, defence, veterans and interest — and none of that has been touched,” said Riedl. “There is zero indication that such savings have actually been identified.”

On Monday, the Tesla boss said he would seek to intensify Doge’s efforts, doubling its current staff and taking aim at large sources of expenditure such as social security.

The Treasury’s own direct spending soared by $29bn since the same month last year, largely driven by a $10bn rise in monthly debt servicing to $86bn, and a $14bn rise in tax credits and associated payments.

Trump has moved in recent days to restrict some of Doge’s activities, telling Musk in front of his cabinet that individual agencies are ultimately responsible for personnel decisions within their departments, and urging the billionaire to use a “scalpel” rather than a “hatchet”.

The move came after several Republican lawmakers criticised the speed and breadth of Doge’s cuts, which have led to employees at various agencies having to be rehired for critical projects including nuclear safety.

Federal judges have also paused or reversed many of Doge’s moves. Last week, the Supreme Court narrowly upheld an order forcing the Trump administration to distribute nearly $2bn for foreign aid work already carried out around the world.