Elon Musk’s attempt to cut government waste through the Department of Government Efficiency (DOGE) might actually be doing the opposite, according to recent reports and expert analysis.
When Musk first introduced DOGE, he made big promises about cutting government spending. Initially, he claimed the department would find and eliminate a whopping $2 trillion in the first months of President Trump’s second term. However, that target has since been dramatically reduced to just $150 billion—only 7.5% of what was originally promised.
“We need our government to work better, but the approaches adopted so far are taking us in the exact wrong direction,” says Max Stier, who runs the nonprofit Partnership for Public Service, which focuses on government efficiency and workforce issues.
The impact on federal workers has been massive. Since Trump returned to the White House, about 260,000 federal employees have been fired, taken buyouts, or retired early. The Internal Revenue Service (IRS) has been hit particularly hard, potentially losing up to one-third of its 100,000 workers. About 22,000 IRS employees may accept Trump’s latest resignation offer.
While fewer employees means fewer salaries to pay, experts warn this mass exodus is creating serious problems.
The Partnership for Public Service estimates that DOGE could actually be costing taxpayers around $135 billion. This figure takes into account the costs of firing workers, rehiring when needed, keeping people on paid leave, and the enormous drop in productivity that comes with such massive workforce changes.
Stier believes these costs amount to roughly half of the federal government’s annual payroll of $270 billion.
IRS Cuts Could Backfire
The situation at the IRS highlights how cutting staff can actually reduce revenue. A Yale University Budget Lab report calculated that if 22,000 IRS employees leave, the agency would lose $8.5 billion in net revenue in 2026 alone. This is primarily because there would be fewer people available to conduct tax audits. Over ten years, this loss could balloon to nearly $198 billion.
Richard Prisinzano, director of policy analysis at The Budget Lab, explains: “For every dollar spent [on IRS staff], there’s quite a bit of revenue that comes in.”
The Wall Street Journal has separately calculated that the recent job cuts could result in tens of billions of dollars in uncollected tax revenue.
Some experts have questioned DOGE’s claimed $150 billion in savings. Reports suggest some of these “savings” came from counting contracts that had already expired years ago. Harry Kraemer, a leadership professor at Northwestern University’s Kellogg School of Management, suggested that DOGE’s reported savings could be overstated by as much as 80%.
Some of DOGE’s practices may be creating additional inefficiency. For example, Musk’s requirement for federal workers to list five weekly accomplishments in regular emails is estimated to take up 165,000 hours of employee time.
Critics argue that the current approach is causing unnecessary disruption. Stier describes the federal workforce as being “traumatized,” pointing to comments made last year by Russell Vought, Trump’s director of the Office of Management and Budget, who said in private speeches about federal bureaucrats: “We want to put them in trauma.”
“When you traumatize the workforce, there’s nothing produced,” Stier warns.
What’s Next?
As Musk prepares to step back from his role at DOGE, questions remain about the department’s long-term impact on government efficiency and taxpayer costs. While reducing government waste is a goal many support, experts suggest that the current approach may ultimately leave the American public “holding the bag” as federal agencies struggle to function with severely reduced workforces.
The true cost of these efficiency efforts may not be known for years, but early analyses suggest that hasty cuts without strategic planning could end up costing far more than they save.
