DOGE Cuts Fail to Stop US Spending Hitting a Record. Yeah, Like Cuts are Going to Make the Difference

Elon Musk’s DOGE Cuts Fail to Stop US Spending from Hitting Record, Newsweek.

Instead for a $2 trillion increase in tax income, repeal the 2017 tax break. It will hit the upper 10% in income the hardest.

Aggressive efficiency push failed to curb soaring federal spending, which hit a record $603 billion last month, according to new U.S. Treasury data.

Musk’s Department of Government Efficiency (DOGE) claims to have saved over $100 billion, yet only a few federal departments saw spending reductions in President Donald Trump‘s first full month.

Why It Matters

Trump charged Musk with rooting out federal government waste and corruption when he returned to office in January, but DOGE has been heavily criticized for blunders involving cutting critical staffing and programs. Musk has touted big savings, but some experts have said they’re tiny compared to the overall federal budget.

Monthly Treasury Statement Report
Receipts and Outlays of the United States Government

The Summary of Budget and Off-Budget Results and Financing of the US Government February 2025

Page 5

Receipts and Outlays of the United States Government. For Fiscal Year 2025 Through February 28, 2025, and Other Periods

What To Know

Overall spending rose by $40 billion, a 7 percent increase compared to the same month last year.

According to the Treasury Department’s monthly statement for February, direct spending surged by $29 billion compared to the same month last year. This is primarily due to a $10 billion increase in debt servicing, which reached $86 billion, and a $14 billion rise in tax credits and related payments.

News of increased spending comes after Musk and DOGE gained access to multiple federal government agencies, reported overspending and alleged corruption—and subsequently canceled contracts and fired or suspended tens of thousands of workers.

The DOGE website estimates it has saved each taxpayer around $652.17 so far, at a total of $105 billion.

Figure 8 details Monthly Outlays of the US Government for fiscal 2024 and a partial of fiscal year 2024

Musk has promised continuing efforts to cut spending, with reports of looking to cut services at the Social Security Administration and the shuttering of an affordable housing program among the latest updates on Wednesday.

DOGE has come under increasing criticism for its sweeping moves, including from within the Republican Party. Trump told the Tesla and Space X owner in front of his Cabinet to use a “scalpel” rather than a “hatchet” when making moves to cut staffing.

On Tuesday, the U.S. House of Representatives passed its stopgap funding bill, which trims $13 billion in non-defense spending from the 2024 budget while increasing defense spending by $6 billion. With an overall discretionary spending top line of nearly $1.7 trillion, the bill does not affect Social Security or Medicare, which are funded separately.

What People Are Saying

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, in a news release: “The Treasury Department confirmed today that we have borrowed a total of $1.1 trillion in the first five months of the fiscal year – or nearly $8 billion a day. What needs no confirmation is that we are almost halfway through the fiscal year and yet we have done nothing in the way of making progress toward getting our skyrocketing debt under control.

“Despite our debt approaching a record share of the economy and interest payments on track to exceed our defense spending – totaling $396 billion to date this year, and on track to reach $952 billion – we are not doing anything to change course. Lawmakers should use these numbers as a wakeup call on the reality of our unsustainable fiscal situation and get to work on putting in place a comprehensive plan to stabilize and bring our debt down to sustainable levels. For the sake of our economy and national security, the time to act is now.”

Chris Edwards, Kilts Family Chair in Fiscal Studies at the Cato Institute, told Newsweek: “The latest data show massive federal deficits continuing, and neither party is taking the threat of the coming fiscal crisis seriously. The president’s DOGE effort—focused on firing federal workers and cutting wasteful grants—so far has not generated enough savings to make a dent on out-of-control federal deficits. Congress needs to act if it wishes to be successful. It needs to terminate spending programs and reduce benefits in the giant entitlement programs.

Congress should cut $180 billion annually of corporate welfare subsidies, and it should start phasing out grants to state governments, which cost over $1 trillion annually. DOGE has raised the issue of waste in government. But deficits are so massive that whole programs need to be eliminated, not just the obvious waste.”

Nearly two months into Trump’s second term in the White House, it may still be too early to see the real impact of federal spending cuts by DOGE, but those supportive of Musk’s work will be keen to see bigger results sooner rather than later.

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Everyone is blaming spending. Lets step back to what happened in 2017. The 2017 Tax Cuts and Jobs Act did not pay for itself over the last 10 years. Also there is the small matter of it passing using Reconciliation which insists it pay for itself (being redundant here). It did not and I am again being redundant.

The repeal of it impacts those in the upper 10% (or higher brackets) of the taxpayers and more so the 1 percenter who make up a million (taxpayers) or slightly more taxpayers having income far greater than the lowest ten percenter. Lest we forget, corporations, the management, and their stockholders have much to lose if the 2017 Tax Cuts and Jobs Act is repealed.

It is not just high rollers such as Jamie getting nervous. It is Corporations and all the stockholders domestic and abroad who have much to lose. But then again, this tax break should never have happened. Party line vote with 12 Repubs in the House joining Dems plus one Repub Senator.

The corporate tax rate would revert back to 35% from 21% (CEPR or Brookings). Jamie would lose some of his bonus going forward.

I believe this is where the influence to sh*t-can Pres Biden is coming from today.

In the run-up to the law’s passage, Trump and his leading economic advisers claimed that the benefits of the bill would trickle down, resulting in substantial gains for U.S. workers and their families and for the U.S. economy as a whole. Critics at the time argued that these claims were unlikely to come to pass. Now, more than six years later, there is little evidence that the law’s costly corporate tax cuts delivered growth or improved well-being for the vast majority of the nation’s workforce. Instead, the law provided the largest tax cuts to the wealthy and profitable corporations, exacerbated inequality, and eroded revenues that could otherwise have been used to address national priorities.

And the pundits are talking about spending? Lets look and see where those tax breaks went.

The benefits of the corporate tax reductions were even more skewed toward the wealthy than those of the bill as a whole. The top 1 percent of the income distribution received a full third of the corporate tax reduction but 20 percent of the reduction from all of the measure’s provisions. (see Figure 2) The middle quintile of the income distribution received 8.2 percent of the benefit of the business reductions and 11.2 percent of those from the bill as a whole.

Foreign owners of equity in U.S. corporations also benefited from the measure’s business tax cuts. New research by economists at the Joint Committee on Taxation and the Federal Reserve Board of Governors estimates that slightly more than $1 out of every $6—17 percent—of the gains from the corporate tax cuts flowed to foreign owners.

Fix the damn problem and let the 2017 tax breaks expire.

Big Surprise . . . The TCJA’s corporate rate cuts failed to trickle down to ordinary workers

During debate over the tax bill, Trump administration economic officials claimed that “the average household would, conservatively, realize an increase in wage and salary income of $4,000” from the TCJA’s combination of a lower corporate tax rate and the ability to immediately write off nonstructure investments. Kevin Hassett, the chair of the Council of Economic Advisers at the time of the bill’s passage, went even further and predicted that average household income could rise as much as $9,000 per year as a result of the tax package. While critics at the time expressed doubts about these claims, proponents argued that the benefits of the tax cut would trickle down to ordinary workers as a result of businesses increasing investment; this, in turn, would lead to higher productivity and higher wages.

Important research first published in 2022 by authors affiliated with the Joint Committee on Taxation and Federal Reserve Board that matched corporate tax returns with information returns for firms’ shareholders and workers found that the benefits of the TCJA’s corporate tax reductions did not trickle down. In fact, the study found that “earnings do not change for workers in the bottom 90% of the within-firm distribution, but do increase for workers in the top 10%, and increase particularly sharply for firm managers and executives.”

The economists also noted that executive pay hikes were only weakly correlated with sales, profits, or sales growth and “are not clearly linked to stronger firm performance.”

I am not going to post the entire commentary I put up in December 2024, You can read it here:

“Why Should the 2017 Tax Cuts and Jobs Act be Trashed,” Angry Bear.

This is a what the ??? moment, News outlets are blaming the population for the costs of the 2017 tax breaks. It belongs to Trump. Repeal the 2017 tax breaks and there is $2 trillion in revenue.