On March 3, in an interview with Bloomberg’s “Odd Lots” podcast, Ray Dalio, American billionaire investor and hedge fund manager warned that the U.S. is on the brink of experiencing an “economic heart attack” within the next three years, unless the Trump administration can rein in deficit spending.
One of Trump’s first acts as president was to issue an executive order establishing the Department of Government Efficiency (DOGE), led by billionaire and serial entrepreneur Elon Musk, in an attempt to both reign in spending and improve efficiency.
In mid-Feruary, Musk, during a Fox News interview alongside Trump, said, “Our goal is to try to get a trillion dollars out of the deficit. And if the deficit is not put under control — America will go bankrupt.”
Musk had previously targeted $2 trillion in cuts.
In the six weeks since Trump’s inauguration, Musk and his team at DOGE have been busy implementing the president’s agenda, finding billions in savings by addressing waste, fraud and inefficiencies.
Workforce reductions
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According to the website, www.doge.gov, as of March 2, DOGE efforts have resulted in an estimated savings of at least $105 billion in taxpayer funds, more than 10 percent of Musk’s revised goal.
DOGE says the savings are a “combination of asset sales, contract/lease cancellations and renegotiations, fraud and improper payment deletion, grant cancellations, interest savings, programmatic changes, regulatory savings, and workforce reductions.”
Workforce reductions have been particularly contentious, with a number of small protests against the measures popping up across the country, and a handful of laid off federal employees conducting interviews with legacy media outlets.
It’s not entirely clear just how much of the federal workforce has been eliminated. Estimates conservatively range from between 85,000 to 100,000, and higher estimates are coming in at around 426,200. Some speculation online claims that once DOGE is wrapped up, one million federal government positions will be eliminated, but these claims are not substantiated by official data. Currently the federal workforce totals approximately 2.3-2.4 million civilians. These figures exclude military and postal service workers.
It’s important to note that a significant portion of these federal job cuts are resignations.
DOGE initiated a “deferred resignation program” offering federal employees payment through September 2025 to leave voluntarily. By mid-February 2025, over 65,000 employees had accepted this offer.
Thousands of other job cuts have come from probationary and targeted layoffs. Reuters reported on Feb. 25 that over 20,000 federal employees were laid off as part of DOGE’s downsizing initiatives.
Few areas have escaped cuts, with layoffs reported from the Centers for Disease Control and Prevention (CDC), the National Institutes of Health, the Food and Drug Administration and the Cybersecurity and Infrastructure Security Agency, among others.
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$105 billion saved
DOGE’s claimed $105 billion in savings comes primarily from three areas: contracts, grants and real estate.
As of March 2, 2334 federal contracts have been cancelled resulting in a savings of around $8 billion.
Among the contracts cancelled was a contract for “DEIA inclusive leadership training for supervisors” worth over $443,000.00. This is part of the Trump administration’s purge of Diversity, Equity and Inclusion (DEI) efforts in the federal government.
A number of subscription packages for legacy media outlets were also on the cutting board, including online subscriptions to the New York Times worth $41,106 and annual subscriptions to Politico Pro valued at around $255,000.
Upwards of $10 billion has been saved by terminating 3489 grants to various organizations.
The bulk of these contracts resided with the now-defunct USAID, the Department of Education, the Environmental Protection Agency, and the Department of State.
Currently, there is no disclosure as to exactly what these grants were, only the government agency and the cost are published online, however the site says, “descriptions are forthcoming.”
Around $660 million has been saved by terminating 748 office leases. According to DOGE, the leases sprawled across 9,587,384 square feet of office space.
Among the leases terminated, two leases totaling over 197,000 square feet were for the National Archives Centers.
Indicating no stone was unturned, leases for as little as 393 and 115 square feet were terminated.
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Going forward
As efforts continue it will be difficult to look at the federal budget and ignore health care spending.
Between Medicare, Medicaid, and other health programs, the United States spent more than $1.8 trillion in 2023, while running a deficit of $1.7 trillion in the same year.
Medicaid alone accounts for eight percent of the federal budget, or about $616 billion in spending and provides healthcare for around 80 million low-income Americans.
Trump has said in the past that he has no intention of altering Medicaid, but he will be looking at the program to address fraud.
While the Office of Management and Budget (OMB) says less than three percent of the spend is fraud, improper payments add up. The Department of Health and Human Services said that in 2024 Medicaid made $31 billion worth of improper payments, mostly as a result of clerical errors. However, erroneous payments, fraud, abusive billing and waste also contributed to this figure.
An OMB report found that $6.5 billion in fraud was lost in Medicaid over an eight-year period as determined by the courts, however this number does not include suspected cases, or cases that were settled out of court.
In addition, according to the Department of Health and Human Services, nearly $89 billion of improper payments were made in 2024 for all Health & Human Services divisions, including Medicare FFS, Medicare Part C, Medicaid and others.
Data from the Office of Management and Budget suggests overpayments accounted for $134.8 billion in lost tax dollars, with Social Security accounting for $8.9 billion, Agriculture $11.4 Billion, the Treasury $21.5 billion, and Health and Human Services accounting for a staggering $82.7 billion, in just 2024 alone.
