Q&A – Where is the DOGE Savings? - Driven By Braman Motorcars
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Today’s Entry: DOGE effect? Where is it?
Bottom Line: Included with that note was a graph “Tracking federal expenditures in real time”. It had updated data through February showing net outlays from the federal government continuing to rise at the onset of the Trump administration and with the early implementation of DOGE. So, what gives if DOGE is supposed to be saving us money? There are two answers, but the most instructive is this.... Congress and the Biden administration agreed to spending it faster than DOGE is saving it.
Total federal spending for the first five months of the current federal government fiscal year ran 13% higher(!) than it did during the prior year. The United States spent $356 billion more during the first five months of this year than they did during the same period of time during the previous year. What that means is that federal spending was authorized by Congress and signed into law by President Biden at a level that is $71.2 billion higher on average per month during this year. Hang onto that number for a minute.
Through February, which is the window of time we’re talking about, DOGE claimed total savings of $55 billion. That means that the previously authorized increase in federal spending was still meaningfully higher than the rate of savings being achieved by DOGE (which is yet another example of how unsustainable the path we’ve been on has been). But that’s also an overly simplistic overview. Not all DOGE savings takes place evenly or equally. I’ll explain.
DOGE savings has come in the form of canceling contracts, terminating grants, ending leases, and reducing federal workforce costs. For example, take USAID which has probably been the most well-known form of DOGEing that’s taken place. The savings primarily represents money that the federal government will no longer spend going forward due to canceled contracts, grants, or leases. For example, terminating a $284 million USAID health program or a $660 million worth of real estate leases means those funds, which were budgeted or obligated, won’t be paid out in the future. But the money that was already spent has been spent. Which leads to the next piece of the puzzle.
Even when DOGE realizes real-time savings – which it has regularly done – it has no authority to redirect those funds. For example, it would seem entirely logical that if we’re running up huge deficits by the day, that any cost savings would be applied automatically by the Treasury for the purpose of reducing the size of the deficit that day. But...it doesn’t work that way. At issue in the immediate moment is that congress, which is the only entity that has the authority to make funding decisions for the federal government, already pledged to spend money. That complicates matters during the current budget year. Much of the saved money is in the mist of legal battles with Leftist interest groups seeking to force the DOGE savings to be spent as authorized by Congress – which by the letter of constitutional law may turn out to be the case.
These are the reasons why it’s so important for DOGE to have moved so quickly in the first place. Its most important role isn’t what it’s doing today, it’s about what can be saved in the future, although they’ve been highly effectual in exacting immediate change as already 13% of the federal workforce has already been eliminated (most are also receiving severance payments for now that still factors into costs).
DOGE doing its work right now is necessary to help advise congress as to what shouldn’t be funded going forward. The timing is especially important as the budget planning process is underway in the House and Senate with what will eventually be Trump’s desired Big, Beautiful Bill, or a different incarnation or two with lots of warts in it.