Elon Musk’s Department of Government Efficiency, or DOGE, says it has saved $160 billion through its push to root out wasteful or fraudulent government spending. But that effort may also have come at a cost for taxpayers, with a new analysis from a nonpartisan research and advocacy group estimating that DOGE’s actions will cost $135 billion this fiscal year.
The analysis seeks to tally the costs associated with putting tens of thousands of federal employees on paid leave, re-hiring mistakenly fired workers and lost productivity, according to the Partnership for Public Service (PSP), a nonpartisan nonprofit that focuses on the federal workforce.
PSP’s estimate is based on the $270 billion in annual compensation costs for the federal workforce, calculating the impact of DOGE’s actions, from paid leave to productivity hits. The $135 billion cost to taxpayers doesn’t include the expense of defending multiple lawsuits challenging DOGE’s actions, nor the impact of estimated lost tax collections due to staff cuts at the IRS.
DOGE has sought to slash federal spending by urging government workers to accept a deferred resignation plan, which allowed many employees to retain full pay and benefits through September without working. Another 24,000 government employees who were fired as part of the reform effort have since been rehired after a court ruling.
Other agencies also have rehired some workers after mistakenly firing them, such as bird flu experts who were dismissed by the U.S. Department of Agriculture. Federal workers have also had to take on tasks such as documenting their weekly accomplishments, which has lowered productivity, Max Stier, president of the Partnership for Public Service, told CBS MoneyWatch.
“We haven’t seen much focus on the waste [DOGE] is creating,” Stier told CBS MoneyWatch about his group’s decision to analyze the costs of DOGE’s cuts. “This is an effort that was created to address waste, but we were seeing the opposite.”
“Ultimately it’s the public that will end up paying for this,” he added, noting that he expects the taxpayers costs to grow after other DOGE cuts take effect.
The White House took issue with the analysis.
“The continued attempts to sow doubt in the massive accomplishments of this never-before-seen effort to make government more efficient speaks more about the illegitimacy of those peddling these falsehoods than good work of DOGE,” White House spokesman Harrison Fields said. “The American public are in lockstep with the president’s mission and will not be swayed by more lies coming from the legacy media.”
Why job cuts could raise costs
The IRS, which is planning on cutting roughly 40% of its workforce, could forego $323 billion in tax revenue over the next decade due to lower tax compliance and a decline in audits, according to an estimate from the Yale Budget Lab.
To be sure, the DOGE cuts could pay off over time, with a leaner, more focused federal workforce. For example, the direct savings from those layoffs will amount to $38 billion over 10 years, the Partnership for Public Service estimated.
But Stier maintains that the costs for taxpayers could grow as they ripple through the economy, such as reductions in funding of health and science research. One analysis by researchers at institutions including the University of Maryland and University of Pennsylvania estimates that cuts to health research will result in a $16 billion annual economic loss, with 68,000 jobs lost.
“One can always imagine a miracle occurring, but none of this makes sense on so many different levels,” Stier said.
DOGE’s “wall of receipts”
DOGE keeps a running public tally of the federal money the task force says it has saved, posted on its website in what is called a “wall of receipts.” But some of those savings have been overstated, a February CBS News investigation found.
At the same time, DOGE’s $160 billion in savings is far less than Musk’s previously stated goal of shrinking annual government spending by $2 trillion, or almost one-third of the federal budget. Many experts say that far more ambitious objective is unlikely to be achieved without cutting major federal programs like Social Security and Medicare, which President Trump has vowed not to touch.
Musk said Tuesday that he’ll curtail his work at DOGE starting in May. His decision comes as Tesla, the electric vehicle maker he runs, saw a 71% plunge in first-quarter profit and a 20% decline in vehicle sales as some consumers snubbed the brand due to objections to Musk’s government work.
Musk said he still plans to spend one to two days a week on DOGE-related work, focusing on eliminating government waste.
“I’ll have to continue to keep doing it for the remainder of the president’s term to make sure the waste and fraud doesn’t come roaring back,” he said during Tesla’s first-quarter earnings call on Tuesday.