I’m sure DOGE will have a long history as the textbook definition of overpromising and underdelivering. There were a lot of reasons to be skeptical of their chances to meet their goals. But I just want to focus on simple realities DOGE didn’t – and couldn’t – alter.
In 2024, federal spending was $6.8 trillion. Of that $6.8 trillion, $4.1 trillion was so-called mandatory spending – spending on programs that is baked into existing law. Over $3 trillion of that $4.1 trillion went to Social Security, Medicare, and Medicaid. Now, there is no doubt fraud and abuse in each of these programs. But even if DOGE could have perfectly cut out 100% of that fraud, it wouldn’t have added up to much in the face of that $3 trillion. And the people of DOGE simply lacked the institutional knowledge needed to accurately identify a lot of what was or wasn’t fraud or waste. In any system, there will always be things that to an outsider look as though they are striking and dramatic anomalies, but actually have a perfectly mundane explanation. Much of Elon Musk’s early, dramatic statements like making claims about there being more active Social Security accounts than the total American population were just examples of him confusing himself by not understanding the basics. So their flurry of activity into mandatory spending was never a promising avenue.
Interest on the debt, while not technically mandatory in the sense defined above, isn’t exactly optional either, unless policymakers are thinking the United States needs another reduction in its credit rating. That interest accounted for another $900 billion in the 2024 budget.
That leaves a total of $1.8 trillion in so-called discretionary spending. The full military budget for operations, maintenance, servicemember pay, and all the rest, accounts for a little less than half of the discretionary budget. As for the remaining half of discretionary spending – you can just look at the infographic linked above and see how that half is divvied up. While discretionary spending might seem like the easiest to go after, the simple fact is that even huge cuts to this area aren’t going to do much to dent the deficit. For example, every now and then you see a news story about how millions dollars of taxpayer money was used on some comically absurd sounding study, like whether or not the mating behavior of clownfish is altered if they are shown video footage of circus clowns or whatever. (To be clear, that is an entirely imaginary study I invented for comic effect, and not something that was ever done, let alone funded with taxpayer money. (I hope.)) And this news story will become everyone’s favorite example about wasteful government spending for a while. But science, space, and technology as a combined category makes up only $41 billion in total – only about 2% of discretionary spending, and about 0.6% of the federal budget. Get rid of the funding for that clownfish study and a thousand more like it, and you still haven’t made a dent in the deficit. It’s a good move if you want to create flashy headlines and maximize your media coverage. But if you’re serious about fixing the deficit, going after the clownfish studies doesn’t even make the top 100 list of priorities.
To make a serious dent in the federal deficit will require serious reductions in mandatory spending, which makes up the bulk of federal spending. Anyone who says they want to reduce federal spending but won’t talk about making serious changes to Social Security, Medicare, Medicaid, and military spending is at a nonstarter from the beginning. These are all very popular programs. Silly studies about clownfish make much easier targets. Any politician who wants to seriously address federal spending should focus on the former. But a politician whose top priority is getting reelected will spend most of their time talking about the latter.
READER COMMENTS
Robert EV
Jul 5 2025 at 12:20pm
Social Security shouldn’t ever have been part of the budget. It should have been separately managed by an agency such as the Fed, and should have been investing bonds other than federal bonds (a very bad habit, and not a very good return on investment).
If I could rewind the clock, knowing what I know now, and be president during the 80s/90s I would have proposed a maximum of 1/3rd of the SS trust fund invested in treasuries, another 1/3rd in municipal bonds, and maybe another 1/3rd as loans to startups and spin-offs. The government has no business owning any corporations in our country (we aren’t a communist regime), but loans aren’t ownership.
Too late though.
Robert EV
Jul 5 2025 at 12:26pm
And to add on, overall if one is to make changes to medicare/medicaid it’s worth looking at the entire medical insurance system, even private insurance. We’ve got multiple insurance types, so which ones have the best bang for the buck, and which the worst?
Another note: a number of those clownfish studies that are brought up happened decades ago, and others are misspun (such as aquatic animal studies where said animals are actually being studied not for their own sake, but on whether they can be used by the military for surveillance or other purposes).
john hare
Jul 6 2025 at 6:13am
Getting the budget under control should be one branch of the tree of getting the government and country on a better track. Other branches being regulatory over reach, getting out of fields that are not suited for government management, and more rational dealing with other nations. Just for starters. The problem being that this would be a multi-decade effort necessarily led by people(congress, executive, bureaucracy, etc) without a vested interest in accomplishing such. In other words, a non-starter.
For a non-coherent start.
War on drugs could be retasked as elimination of non-useful over control. Legalize, tax, and reintegrate much of the underground economy into the legitimate world. People with addiction problems get help, though some will die from accessible drugs that are relatively inexpensive. This defunds the cartels with those members having to find other sources of income, possibly even get jobs using their talents. People with problems gain the possibility of employment and a road out of the dead end lifestyle. Net increase in tax base and reduction in enforcement costs, though as I said, a non-starter.
Find a way to get the government out of the medical industry in a coherent way. Between subsidies, restrictions, crony capitalism, and general attempts to control a major industry by those without the expertise creates a system with excessive costs relative to results. This would require long term attention by people with the knowledge to do things right and the authority to do them, as well as the humility to get out of fields in which the government shouldn’t be involved in the first place. Again, a non-starter.
A comprehensive look at the military and the rational involvement in world affairs. I think the US operating as world policeman (where feasible) is non-optimal. While I am of the opinion that much military spending is wasteful, I am far from qualified to say which portions. A hard look at overseas operations may find serious savings. And it may be that reductions could have a detrimental effect on the world and our country. Several wars have been started because it was believed that the US would not react or cold not react in time. Again, not a field I am qualified to get specific with,
Getting government out of the retirement business. Most people that run the numbers think that individuals investing for their own retirement would be far superior to the Social Security morass. Unfortunately, many people do not think ahead or get into untenable situations that will require help which all too often gets the government involved. There are many ideas out there that seem technically feasible and politically improbable. I don’t even pretend to know this answer.
Simplify the tax code such that billions of man-hours a year are not spent figuring it out and can be put to productive use. Accountants in particular tend to be smart and educated such that application to other fields should be beneficial to them. Not top mention businesses that could focus on productivity more and tax reduction less. Another thing well above my pay grade.
In my opinion, the federal budget could be halved over the course of a decade while the GNP and tax base could be doubled. AIN’T HAPPENING.
Monte
Jul 6 2025 at 11:01am
No truer words…. Higg’s “ratchet effect” on full display.
Robert EV
Jul 6 2025 at 8:48pm
Having no basis of expertise to opine, I think a federally funded health savings account (that people can add additional funds to at will) along with a catastrophic insurance plan would encourage shopping around for deals while still ensuring that people don’t skimp on care due to price.
Thomas L Hutcheson
Jul 6 2025 at 11:37am
The problem with SS is not how the (transient) surpluses were “invested” but that revenues were derived from a wage tax instead of a VAT (understandable in FDR’s time, not so in the Reagan-O’Neil era).
Matthias
Jul 6 2025 at 8:18pm
Singapore’s CPF works fairly well and is sustainable, and sort-of uses a wage tax, too.
However it makes more sense to call CPF a forced savings programme, not a tax.
Matthias
Jul 6 2025 at 8:17pm
They could buy very broad global index funds, preferably ETF. That could be both debt and equity indices.
Buying ETF removes most of the discretion that we don’t want them to have. It also removes any skill requirement.
Going global goes for greater diversification.
rick shapiro
Jul 5 2025 at 5:18pm
Saying that DOGE failed makes the mistaken assumption that its main purpose was to reduce government waste. In fact, it was one arm of Trump’s lawless plan to eliminate programs that he personally disliked.
Peter
Jul 5 2025 at 8:09pm
Nothing lawless about it. Discretion is built into the system, he’s using it, just like ALL presidents. Think of all those unfunded czars and programs Obama created sometimes in direct defiance of Congress like Climate Services under NOAA. Trump isn’t doing anything unusual other than going after sacred cows that should have never existed in the first place or should have long since be slaughtered.
Take the CPB for example, that was Congress, not Trump, that wrote into the law they can request whatever budget they needed. They requested zero as Congress authorized. People keep blaming Trump for simply following the law, it’s not his fault Congress writes laws that give him unfettered authority. Nothing stopped the dozens of Democratic administrations since the 1940s from revoking the law that authorized denaturalizing Nazis, heck Obama even used it himself to deport that 100 year old man from Cleveland back around 2009 IIRC but yeah, Trump.
I agree with you on DOGE but it wasn’t a bad thing, what was bad was it didn’t go far enough. TBH I find it great the system is finally starting to realize it’s legamorons, sadly they aren’t responding to them though as A. Kling thought they would. He figured it would actually spark getting them fixed rather than doubling down on them as we are now.
Walter Boggs
Jul 7 2025 at 10:33am
You are correct, Rick. The administration simply lied about the purpose of DOGE. All it really did was undermine future efforts to rein in wasteful spending.
Monte
Jul 5 2025 at 6:35pm
Nice post! I was prepared to defend DOGE on the merits, but most independent sources have determined that the costs far outweighed the benefits. It was all sound and no fury. That’s not to say there isn’t waste, fraud, and abuse. But as you point out, any serious discussion of reducing the debt must include a plan for addressing mandatory spending.
Mactoul
Jul 5 2025 at 11:46pm
Four things were targeted:
1) Global warming climate change cult entrenched in science, NGOs, and universities– successfully so far
2) Trans cult– similarly entrenched–also successful yet
3) Nexus of Leftist NGOs, journalists etc funded through USAID– successful.
4) Federal bureaucracy itself — partly successful.
So, achievements of DOGE may be quite long-lasting and not easily calculable in dollars and cents. A little money funneled to a particular journalist could do a great deal of mischief.
Thomas L Hutcheson
Jul 6 2025 at 11:33am
Another factor was equating “efficiency” with spending reduction. Poor design of taxes — on wages instead of a VAT, taxation of business income, taxation of income rather than consumption — and regulations not guided by cost-benefit analysis is much more important.
Warren Platts
Jul 6 2025 at 1:31pm
What bugs me is the SS fund ran a surplus for decades but what were they mainly invested in? The other side of the government! So now to go after little old lady’s $800 social security checks seems rather unfair.. It’s not their fault.
Alan Goldhammer
Jul 6 2025 at 4:11pm
I was tangentially involved in the Gore Reinventing Government and the Bush-II efforts to remove extraneous regulations. The Gore effort had more impact but the amount of money saved was minimal. At any rate, here are my modest suggestions:
John Hare hits it out of the park. Clean up the tax code in return for lower rates. There is no reason to keep adding benefits (no tax on tips or overtime) if the preferences can be eliminated. I should not have to spend a couple of hours with Turbo Tax every year doing my taxes since the USG already knows who much I have made.
Social Security is a hard one unless one goes after the COLA. I received a nice pension when I retired that was a flat yearly payout with no adjustment. Why should Social Security be different? In fact, it can be argued that the reason Social Security is in trouble is because COLAs increase the drawdown. Right now my wife and I are taxed on 85% of our SS income because of IRA, pension, and investment income. So there already is some form a means testing there. Maybe tax rates could be increased for those that have other sources of income.
Medicare and in particular Medicare Advantage need to be reformed. I’m pretty knowledgeable (I think😂), but there does appear to be a lot of scamming going on. The USG overpays for Medicare Advantage plans and allows reckless upcoding so providers get more income for minimal service. Even though I’m on traditional Medicare, I got one of these solicitations for 24/7 access to manage an almost non-existent healthcare issue. Had I accepted somebody was going to get money for doing nothing!
Healthcare costs need to be reined in by carefully monitoring how reimbursement coding is done. AI might be able make a contribution here. When I look at payment statements from both Medicare and my secondary insurance, I often wonder if procedures are upcoded for higher reimbursement.
Drug prices need to be controlled at some level. I spent my working career in the biopharma industry and support the patent system and reward for innovation. However, when the rest of the world has price controls of some form, it’s easy to see why prices are higher in the US. The patent system is also be misused as companies will make a modest change to a drug formulation and get a new patent.
steve
Jul 6 2025 at 7:28pm
There is some scamming going on with Medicare but it’s hard to tell how much. For example, the failure to fill out forms properly counts as fraud. That said, one of the advantages of Medicare is that it’s easier top bill and it costs less to do so. That means a bit more fraud but less money spent on billing. The private insurers require more credentialing, more credentialing and more pre-certs which make billing more costly, but they probably have less fraud. It’s about the trade offs.
Just as an aside, I would note that the large majority of economists i have ever read agree that it would be good if we could somehow use market mechanisms to reduce health care costs, but no one has been able to figure out how to do it. With a few exceptions health care has been more costly and/or there has been less access when people have tried to make more use of markets.
Steve
Alan Goldhammer
Jul 6 2025 at 4:12pm
Sorry but it looks like the formatting was stripped out of my post.
Robert EV
Jul 6 2025 at 8:52pm
I’ve noticed that some of the formatting buttons don’t work (e.g. “add brown block quote” – I basically don’t trust any formatting button to the right of the Blockquote). At other times I’ve noticed that it looks like all formatting is stripped, but this is actually because your post is temporarily caught in the spam queue.
Craig
Jul 7 2025 at 8:12am
DOGE is supposed to be Congress of course. The budget is an easy math problem, its an impossible political one. I suspect the government will ultimately try to inflate their way out of it.
Alan Goldhammer
Jul 7 2025 at 4:32pm
In the good old days, the authorizing committees in Congress would come up with proposed Agency budgets which would then go the respective Appropriations subcommittee for approval. USG would have a budget on October 1 which was the deadline. Big Continuing Resolutions are a relatively new and unwelcome activity.