Musk wants to slash $2 trillion in federal spending. Is that possible?

WASHINGTON — President-elect Donald Trump has vowed to cut wasteful government spending, fire what he considers rogue bureaucrats and overhaul federal agencies once he is back in power.

But slashing the budget and substantially scaling back the federal workforce is a formidable task. Among other things, it could require cutting popular programs that aid older Americans and reducing resources at agencies that support the nation’s defense and security.

On Tuesday, Trump tapped two loyal supporters to help find ways to carve up the budget: Elon Musk, the world’s richest man, and Vivek Ramaswamy, a former pharmaceutical executive who was once Trump’s rival for the Republican presidential nomination. Trump said the two would lead a new Department of Government Efficiency that would drive “drastic change.”

Trump has not set a dollar amount that he wants the commission to cut from the federal budget. Musk has.

After Trump promised on the campaign trail to tap Musk to head an efficiency commission, the entrepreneur said it could cut “at least $2 trillion” from the $6.75 trillion federal budget, without providing many details about how that could be done. Musk also said that the 400-plus federal agencies should be pared down to 99 or fewer, though a massive reduction in the number of agencies would require congressional approval.

What did Trump ask the commission to do?

Trump said its mission would be to help the administration “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures and restructure Federal Agencies.” He gave it until July 2026 to finish its work.

The commission will operate outside the government but will provide guidance and work with the White House Budget Office, Trump said.

It’s not clear who will pay for the commission’s staff members, or if they will be paid at all: Musk said in a recent post on X that the “compensation is zero.” The “department” already has an account on X, Musk’s social media platform, and said Thursday that it was seeking “super high-IQ small-government revolutionaries willing to work 80+ hours per week on unglamorous cost-cutting.”

Can the administration cut $2 trillion in spending?

Despite Musk’s confidence, there are no easy options.

It’s not hard to find questionable spending in the federal budget. Medicare and Medicaid alone spent $100 billion on fraud and erroneous payments last year. But fraudulent payments are hard (and expensive) to screen out. And finding $2 trillion in savings would be thorny without cutting programs that Congress or Trump would want to protect.

Here’s the math, based on the 2023 budget: About a third of federal spending went to Medicare and Social Security, programs that aid older Americans. Trump has said explicitly that he will not cut those. An additional 13% of the budget went to national defense. Based on his track record, Trump seems unlikely to make major cuts there either. He massively boosted military spending in his first term, and has promised to “strengthen and modernize” the military in his second.

An additional 10% of federal spending went to pay interest on the government’s existing debts. Musk has cited that as an area of wasteful spending, recirculating an X post from his America PAC that identified interest payments as something the commission could “fix.” But it would be a risky place to pursue any cuts. The government already committed to making these payments when it borrowed the money. If the U.S. suddenly stopped paying, the result could be a default that creates higher interest rates for average Americans and a potential recession.

What’s left?

That leaves about 40% of the budget. Cabinet agencies. Veterans benefits. Medicaid, which provides health care for the poor and disabled. Cutting $2 trillion from this sector alone would require huge cutbacks in services that Americans rely on.

In the past, both Trump and Republicans in Congress have called for cuts — even large ones — to some of these programs. But they’ve shown no appetite for chopping them on the scale Musk has promised. Even the Department of Education, a top target for conservatives this year, supports school districts across the country and has allies on both sides in Congress.

“To eliminate a third of the government, you would have to dramatically eliminate full functions of the federal government,” said Brian Riedl, a senior fellow at the right-leaning Manhattan Institute. “You would have to dramatically scale back programs like Social Security, Medicare and defense and veterans. It’s not going to happen.”

Could Trump just defy Congress and refuse to pay for things he thinks are wasteful?

By law, no.

Typically, the president’s role in the budget process is to propose a budget, then wait for Congress to decide what to spend. A 1974 law limits the president’s ability to refuse to spend funds after Congress has appropriated them (that refusal is called “impoundment” in Washington). Presidents can only refuse to spend money if Congress itself approves.

But Trump has reportedly considered declining to spend the money anyway, despite that law. Some Trump allies have suggested that the 1974 law is unconstitutional. So Trump could defy Congress, in the belief that he will win an eventual court challenge.

Could the administration slash the federal workforce?

The federal government employs roughly 2.3 million civilian workers across the country, according to the most recent data from the Office of Personnel Management. About 85% of those employees live outside the Washington metro area.

Trump could try to reinstitute Schedule F, an executive order he issued late in his first term that would have empowered his administration to strip job protections from many career federal employees and make them more like political appointees who can be fired at will. President Joe Biden revoked the order, and his administration finalized a rule this spring that makes it harder to reinstate.

But firing thousands of employees risks impairing critical functions of the government, such as keeping airplanes from colliding and electrical grids from going dark. Trump could also find it difficult to drastically scale back the federal workforce without cutting resources at agencies that support defense and national security.

More than 60% of federal civilian workers are employed by the Departments of Defense, Veterans Affairs and Homeland Security, which includes border control, a top priority of Trump’s. The Defense Department makes up the largest share, employing about 34% of the workforce. The Department of Veterans Affairs employs 21%.

Even if Trump could shut down the Education Department, that would not make a huge dent. The department employs only 0.2% of all federal civilian workers, according to Office of Personnel Management data.

How much does the government spend on federal employees?

In fiscal year 2023, the federal government spent more than $358 billion on pay and benefits for civilian workers in the executive branch.

The government also spends billions of dollars on contracts with outside companies and organizations each year.

There could be places for Trump and the commission to cut the workforce, but the challenges that come with scaling back could make it difficult to see substantial savings.

“While there may be savings to be had by cutting government employees, it will not be a significant amount that makes much of a dent in the budget deficit,” Riedl said.

This article originally appeared in The New York Times.

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