DOGE cut 9% of federal workforce, but total spending rose 6%

DOGE reduced the federal civilian workforce by roughly 271,000 to 317,000 employees between January and December 2025, a reduction of approximately 9 to 13 percent. That makes it the largest peacetime federal workforce cut in U.S. history. The workforce dropped from about 2.3 million civilian employees to levels not seen since the mid-2010s. About 123,000 workers accepted a deferred-resignation offer announced January 28, while tens of thousands more were laid off through agency reductions in force.

Despite the historic workforce cuts, total federal spending rose from $7.135 trillion in fiscal year 2024 to $7.558 trillion in fiscal year 2025 — a nearly 6 percent increase. The Congressional Budget Office confirmed that total spending excluding interest rose by $220 billion, or 4 percent, during the fiscal year. This contradicts Musk initial promise to cut $2 trillion in annual spending, a target he later revised down to $1 trillion and then to $150 billion.

The reason workforce cuts do not translate into spending cuts is structural: federal worker salaries represent less than 5 percent of total federal spending and about 1 percent of GDP. The Marketplace analysis found the total federal payroll amounts to approximately $336 billion annually. Meanwhile, mandatory spending on Social Security, Medicare, Medicaid, and debt interest payments totals roughly $5 trillion per year — nearly 15 times the entire federal payroll — and those programs run on autopilot set by statute, not executive action.

DOGE claimed $160 billion in savings on its website, but investigative analyses cast doubt on those figures. The Partnership for Public Service, a nonpartisan research group, estimated DOGE actions cost $135 billion in 2025 through paid administrative leave, severance, litigation costs, rehiring mistakenly fired workers, and productivity losses. CBS News investigation found that three of DOGE largest claimed cuts had actual savings of only 3 percent of what was claimed. Musk 'wall of receipts' on the DOGE website later showed errors, including two false $8 billion Department of Defense contract entries that were larger than 25,000 other DOGE claims combined.

The IRS is a case study in how workforce cuts can backfire fiscally. DOGE eliminated 31 percent of the IRS tax audit workforce — 3,623 revenue agents — by March 2025, according to the Treasury Inspector General for Tax Administration. The Yale Budget Lab projects that losing 18,000 IRS personnel could reduce federal revenue by $159 billion over 10 years. One Center for Budget and Policy Priorities analysis put the 10-year revenue loss at $323 billion. Every dollar cut from IRS enforcement capacity historically generates $5 to $10 in lost revenue from uncollected taxes, making IRS cuts one of the most fiscally counterproductive cost-cutting measures possible.

DOGE operated through a legally ambiguous structure that faced immediate court challenges. Congress did not create DOGE — it was established by executive order on Trump first day as a White House advisory body. Federal district judges questioned whether Musk held a government position subject to Senate confirmation (he did not), and lawsuits alleged violations of the Federal Advisory Committee Act, which requires public meetings and balanced membership for bodies that advise the executive branch. Judge Tanya Chutkan wrote that the states legitimately called into question the unchecked authority of an unelected individual and an entity that was not created by Congress.

The agencies hit hardest by DOGE cuts were those providing direct services to American citizens. The Social Security Administration, Internal Revenue Service, Veterans Administration, Department of Health and Human Services, and U.S. Agency for International Development all faced major workforce reductions. An IRS watchdog warned of likely issues with the 2026 tax filing season as a direct result of the 25 percent cut to IRS workforce. Federal agencies that process veterans benefits, review food safety, conduct disease research, and administer student loans all lost significant staff capacity.

Historical precedent suggests that efficiency commissions rarely achieve their stated savings goals without congressional action. Reagan's 1982 Grace Commission produced 2,478 recommendations and projected $429 billion in savings over three years — but most recommendations requiring legislation were never implemented, and the commission had no plan for adoption. Clinton's Reinventing Government initiative worked with agency officials, produced actionable recommendations, and achieved significant savings by contrast. The key difference was implementation: cutting workers without also cutting the programs they administer creates operational disruptions without fiscal relief.

Community-level impacts of DOGE cuts were severe and unequal. 🏛️Virginia alone lost 23,500 civilian federal jobs through November 2025. Close to one-third of federal employees surveyed said their workplace was disrupted to a very large extent. CNN documented cases of former federal workers facing new careers, medical problems, and financial hardship a year after the cuts. The communities most dependent on federal employment — many of them in states that voted Republican, like rural communities near military bases and national parks — bore disproportionate economic costs from the workforce reductions.