Even the latter, much smaller number cannot be trusted, because DOGE has been vague about most of its purported cuts and has repeatedly exaggerated the ones it has specified. And last week, as he shifted his focus from DOGE back to his businesses, Musk acknowledged a reality that should have been obvious from the outset: Any serious attempt to address the country's looming fiscal crisis will require hard choices and congressional action.
Shortly before last year's presidential election, Musk breezily estimated that DOGE could cut annual federal spending by "at least" $2 trillion, which was about the size of the budget deficit in FY 2024. At a press conference in February, he reduced that target by 50 percent, saying DOGE could "cut the budget deficit in half" by insisting on "competence and caring."
That goal was always improbable, since it would require eliminating something like 63 percent of discretionary spending. And although Musk said DOGE would be "as transparent as possible," the project's documentation of its work has fallen far short of that promise.
As of Tuesday, DOGE's website claimed $165 billion in "estimated savings" from "asset sales, contract/lease cancellations and renegotiations, fraud and improper payment deletion, grant cancellations, interest savings, programmatic changes, regulatory savings, and workforce reductions." But DOGE's "Wall of Receipts" described just $69 billion in spending reductions, accounting for 42 percent of the purported total.
News organizations have identified many problems with those "receipts." The errors include contracts that were not actually canceled, contracts that were terminated during the Biden administration, iffy estimates of savings on contracts that had not been awarded yet, contracts that were counted multiple times, conflation of contract caps with actual spending, the inclusion of past spending in estimates of future savings, and overvaluation of contracts and grants.
DOGE's hyperbole is so pervasive that Manhattan Institute budget expert Jessica Riedl describes its work as "government spending-cut theater," saying "most of what is claimed to be spending cuts are just accounting errors." Somewhat more generously, Nat Malkus, a senior fellow at the American Enterprise Institute, estimates that DOGE's actual cuts amount to about half of the total it claims.
"They're just spinning their wheels, citing in many cases overstated or fake savings," Romina Boccia, director of budget and entitlement policy at the Cato Institute, told The New York Times last month. "What's most frustrating is that we agree with their goals. But we're watching them flail at achieving them."
DOGE's numbers do not distinguish between one-time savings and recurring savings or between total savings and annual savings. Some of its categories, such as "workforce reductions" and "programmatic changes," are plausible but vague, while others, such as "asset sales" and "regulatory savings," do not seem to imply any spending reductions at all. (...)
"If we don't do something about this deficit," Musk warned in February, "the country's going bankrupt." Back then, he implied that DOGE was up to that challenge. More recently, he has been singing a different tune.
"It's really difficult," Musk conceded last week. The question, he said, is whether there is "sufficient political will in Congress and elsewhere." Now he tells us.
That goal was always improbable, since it would require eliminating something like 63 percent of discretionary spending. And although Musk said DOGE would be "as transparent as possible," the project's documentation of its work has fallen far short of that promise.
As of Tuesday, DOGE's website claimed $165 billion in "estimated savings" from "asset sales, contract/lease cancellations and renegotiations, fraud and improper payment deletion, grant cancellations, interest savings, programmatic changes, regulatory savings, and workforce reductions." But DOGE's "Wall of Receipts" described just $69 billion in spending reductions, accounting for 42 percent of the purported total.
News organizations have identified many problems with those "receipts." The errors include contracts that were not actually canceled, contracts that were terminated during the Biden administration, iffy estimates of savings on contracts that had not been awarded yet, contracts that were counted multiple times, conflation of contract caps with actual spending, the inclusion of past spending in estimates of future savings, and overvaluation of contracts and grants.
DOGE's hyperbole is so pervasive that Manhattan Institute budget expert Jessica Riedl describes its work as "government spending-cut theater," saying "most of what is claimed to be spending cuts are just accounting errors." Somewhat more generously, Nat Malkus, a senior fellow at the American Enterprise Institute, estimates that DOGE's actual cuts amount to about half of the total it claims.
"They're just spinning their wheels, citing in many cases overstated or fake savings," Romina Boccia, director of budget and entitlement policy at the Cato Institute, told The New York Times last month. "What's most frustrating is that we agree with their goals. But we're watching them flail at achieving them."
DOGE's numbers do not distinguish between one-time savings and recurring savings or between total savings and annual savings. Some of its categories, such as "workforce reductions" and "programmatic changes," are plausible but vague, while others, such as "asset sales" and "regulatory savings," do not seem to imply any spending reductions at all. (...)
"If we don't do something about this deficit," Musk warned in February, "the country's going bankrupt." Back then, he implied that DOGE was up to that challenge. More recently, he has been singing a different tune.
"It's really difficult," Musk conceded last week. The question, he said, is whether there is "sufficient political will in Congress and elsewhere." Now he tells us.
by Jacob Sullum, Reason | Read more:
Image: Brian Merchant/How federal workers can organize to stop DOGE
[ed. 'Political will' for what? Actually doing something positive instead of giving more billions to the military and tax cuts to the rich? Musk might be out the limelight for now but his minions are still burrowed in like termites. See also: this Profile in Cowardice: Will Republican senator Susan Collins stay on the sidelines or take on Trump? (Guardian); and, DOGE Is Obliterating American Industry (American Prospect):]
The LPO has funded thousands of successful projects, from renewable-energy installations, to solar and battery factories, to new low-emission industrial processes, to power grid upgrades, to the first new nuclear power plant in decades, to domestic EV companies, and much more in that vein. It has virtually no overhead, with just a few hundred staffers running a fund of more than $400 billion. Almost all of these projects are successfully paying back their loans. For any government—and especially the American one, with its underfunded and sclerotic agencies—this counts as a smashing success.
But not for much longer. The LPO is being gutted by Elon Musk—who got an LPO loan himself just 15 years ago—and his DOGE goons. New loans have been frozen, it seems permanently. Worse, a reported 60 percent of LPO staff has already accepted DOGE buyouts, with more to come. Even existing loans are under threat; the California utility PG&E recently requested a rate hike in part because its $15 billion LPO loan faces “substantial uncertainty.” One battery company has canceled a planned LPO-funded factory in Arizona, while another has canceled its planned LPO-funded factory in Georgia and moved it to China. (America First!) ...
[ed. 'Political will' for what? Actually doing something positive instead of giving more billions to the military and tax cuts to the rich? Musk might be out the limelight for now but his minions are still burrowed in like termites. See also: this Profile in Cowardice: Will Republican senator Susan Collins stay on the sidelines or take on Trump? (Guardian); and, DOGE Is Obliterating American Industry (American Prospect):]
***
One of the hidden gems of American government is a small division of the Department of Energy called the Loan Programs Office. This is a government bank that hands out loans to companies with business plans that go beyond the technological frontier, with ideas nobody has tried before. Commercial banks will generally not loan to such companies—as a rule, private bankers want something that is already proven to work—so the LPO helps such entrepreneurs get from the drawing board to producing and selling an actual product.The LPO has funded thousands of successful projects, from renewable-energy installations, to solar and battery factories, to new low-emission industrial processes, to power grid upgrades, to the first new nuclear power plant in decades, to domestic EV companies, and much more in that vein. It has virtually no overhead, with just a few hundred staffers running a fund of more than $400 billion. Almost all of these projects are successfully paying back their loans. For any government—and especially the American one, with its underfunded and sclerotic agencies—this counts as a smashing success.
But not for much longer. The LPO is being gutted by Elon Musk—who got an LPO loan himself just 15 years ago—and his DOGE goons. New loans have been frozen, it seems permanently. Worse, a reported 60 percent of LPO staff has already accepted DOGE buyouts, with more to come. Even existing loans are under threat; the California utility PG&E recently requested a rate hike in part because its $15 billion LPO loan faces “substantial uncertainty.” One battery company has canceled a planned LPO-funded factory in Arizona, while another has canceled its planned LPO-funded factory in Georgia and moved it to China. (America First!) ...
The main difference between this and similar efforts to destroy, say, the Consumer Financial Protection Bureau—in this supposed cost-cutting exercise—is that the LPO makes a fair bit of money. The estimated $500 billion in additional federal debt brought about by DOGE gutting the IRS will only get bigger by taking the LPO off the board.
A more interesting question concerns Elon Musk himself. His company, Tesla, was saved from certain bankruptcy in 2010 by a $465 million LPO loan, which provided critical funding while the company was struggling to get its Model S to market. It is, of course, absolutely maddening that a man who benefited from immense government largesse—the LPO loan is only a tiny fraction of the $38 billion in subsidies Musk has collected over the years—is pulling the ladder up behind him, all while he gives himself government contracts to build a completely pointless missile defense shield and drain even more from the taxpayer.
A more interesting question concerns Elon Musk himself. His company, Tesla, was saved from certain bankruptcy in 2010 by a $465 million LPO loan, which provided critical funding while the company was struggling to get its Model S to market. It is, of course, absolutely maddening that a man who benefited from immense government largesse—the LPO loan is only a tiny fraction of the $38 billion in subsidies Musk has collected over the years—is pulling the ladder up behind him, all while he gives himself government contracts to build a completely pointless missile defense shield and drain even more from the taxpayer.
