Discussions about federal spending are difficult because the numbers are so large that they can be difficult to grasp. How many ordinary folks can truly comprehend how much $1 billion — that’s a thousand millions — is? And still, it’s a rounding error (just 0.01 percent of spending) compared with the nearly $7 trillion federal budget.
This is the context for the federal spending cuts led by President Trump and Elon Musk’s Department of Government Efficiency. Last week, the administration announced its latest dismissals: 10,000 employees at the Department of Health and Human Services. That sounds like a lot of people, but it’s small for a government that employs three million civilian workers.
How much has DOGE pared back so far? Federal spending is actually higher this year than it was at this point in 2024, according to the Hamilton Project.
Today’s newsletter walks through what the federal government spends money on, to clarify these big numbers and show the actual effects of Trump’s efforts.
Growing debt
Since the early 2000s, the federal government has spent more money — sometimes much more — than it collects in taxes. That has caused the debt to grow to levels not seen since World War II.
For years, many economists downplayed concerns about the debt. Interest rates were low, and debt payments — the cost of borrowing all that money — were consequently low, too. Inflation was also low, which suggested that government spending hadn’t overheated the economy.
But interest rates and inflation have increased. Today, the federal government spends more to pay off its debt each year than it spends on Medicare or the military. Economists now warn that the federal debt is piling up too quickly.
At the same time, politicians are scared of cutting popular programs. Trump has ruled out cuts to Social Security, Medicare, Medicaid and the military. Along with interest payments, that’s about 70 percent of what the government spends. There’s an old saying among wonks: The United States government is just an insurance company with a standing army.
All of the other programs you hear about (schools, welfare payments, foreign aid, medical research) make up roughly 30 percent of the federal budget. Trump would have to eliminate all of those to balance the budget without touching the programs he has deemed untouchable.
DOGE’s cuts
Trump and Musk claim they can eliminate most of the deficit by downsizing the federal work force — the Times is tracking the firings here — and ending waste and fraud. This is the work DOGE says it’s doing. But these efforts, too, are likely to fall short.
Presidents and Congress have launched many initiatives over the past few decades to tackle waste and fraud. They did not find significant savings. Watchdogs also track improper payments, which include fraud, duplicate charges and payments to ineligible recipients. These made up $149 billion in the most recent fiscal year. Even if DOGE managed to root out all of these payments — a difficult task for many technical reasons, The Wall Street Journal reported — it would shrink the deficit by only 8 percent.
Similarly, shrinking the federal work force can do only so much. Even if Musk managed to fire every civilian employee and cut their benefits — an outlandish scenario — he would reduce the deficit by just 14 percent.
Some layoffs could even increase the deficit. The Biden administration wanted to hire more workers at the Internal Revenue Service to crack down on tax cheats. Experts said the plan would bring in $2.5 in tax revenue for every $1 spent. Trump wants to get rid of the new employees anyway.
DOGE claims it has slashed $130 billion in spending. But its ledger is filled with errors, my colleagues David Fahrenthold and Jeremy Singer-Vine reported. The agency has revised its estimate downward multiple times, in acknowledgments of mistakes.
In the end, the debt problem remains what it has long been: Republicans and Democrats refuse to cut popular but expensive federal programs and don’t want to raise taxes on most Americans. As long as that’s true, the federal government will remain in the red.
Related: Musk has made sweeping claims about fraud in government spending. Read a fact-check.
THE LATEST NEWS
Trump Tariffs
N.B.A.: A brawl during Minnesota’s win over Detroit ended with five players and two coaches ejected. See the video.
ARTS AND IDEAS
At a recent event in San Francisco, there was only one rule: no cake, no entry. There thousands gathered with deserts both store-bought and homemade, sweet and savory for Cake Picnic, a touring festival that one attendee said was harder to get a ticket for than a Taylor Swift concert. See inside.
More on culture
-
The actor Richard Chamberlain died at 90 this weekend. He was the most compelling face of a maximalist, soapy television era, our TV critic writes.
-
Johnny Mathis, among the best-selling recording artists of the 20th century and a pioneer of romantic ballads, will retire from touring after almost 70 years.
