Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. Trump and his congressional supporters are on track to blow up the federal debt.
Jessica Riedl at The Atlantic:
These spending data do not flatter the Musk project. Total federal outlays in February and March were $86 billion (or 7 percent) higher than the levels from the same months a year ago, when adjusted for timing shifts. This spending growth—approximately $500 billion annually—continues to be driven by the three-quarters of federal spending allocated to Social Security, Medicare, Medicaid, defense, veterans’ benefits, and interest costs. These massive expenses have been untouched by DOGE’s focus on small but controversial targets such as DEI contracts and Politico subscriptions.
...Cost reductions from laying off federal employees have been too small to show up in the data. This is not surprising, because even laying off one quarter of the 2.3 million federal civilian employees would shave off just 1 percent of federal spending. To be fair to DOGE, more savings will materialize in October, when the salaries of the 75,000 federal employees who took a buyout come off the books. That should save Washington $10 billion a year, or 0.1 percent of federal spending—except even that is an overestimate, because Washington will surely end up hiring contractors to perform at least some of the work previously handled by those civil servants, and many contractors cost more than employees.
That, by the way, is the good news for DOGE. The bad news is that the project seems quite likely to expand long-term budget deficits. Slashing IRS enforcement will embolden tax evasion and reduce revenues by hundreds of billions of dollars over the decade. Laying off Department of Education employees who ensure collection of student-loan repayments will increase the deficit. Illegally terminated federal employees are already being reinstated with full back pay, leaving the government with little to show for its trouble besides mounting legal fees.
Even if DOGE somehow manages to end up in the black, any modest savings it achieves will be completely overwhelmed by the GOP’s push to expand the 2017 tax cut at a cost of roughly $500 billion annually. Claims that Washington can no longer afford to spend 0.1 percent of its budget providing lifesaving HIV treatments to 20 million impoverished Africans cannot be taken seriously when the administration and Congress are preparing to cut taxes and expand other spending by trillions of dollars.
