[By Guancha Observer, Shao Yun]
May 30th was the last day of Elon Musk's tenure at the so-called "Department of Government Efficiency" (DOGE). The American billionaire once raised a red chainsaw to symbolize his determination to drastically cut federal spending in the U.S. However, Reuters reviewed the achievements of DOGE over the past four months on the same day and found that instead of "cutting," DOGE had merely "trimmed" some of the U.S. government's expenditure projects with scissors.
According to DOGE's own claims on its website, it has saved American taxpayers $175 billion. However, the report points out that more than half of this amount lacks evidence. Therefore, Reuters turned to the U.S. Treasury's daily published government expenditure reports and found that the expenditures of several targeted federal agencies were only reduced by approximately $1.9 billion year-over-year, far below the initial target of $2 trillion set by Musk and accounting for only 0.5% of total federal spending.
The Financial Times of the UK also couldn't resist calculating for Musk on May 30th: As one of Donald Trump's main donors, Musk invested $250 million during last year's election, which earned him a 130-day journey as a "special government employee" and the title of "first brother" of the president. However, not only did his efforts to reduce spending achieve little effect, but his companies, especially Tesla, also struggled to completely avoid the backlash from public opinion triggered by his involvement in politics.
Musk recently openly expressed his dissatisfaction, calling DOGE the "scapegoat for all problems," and criticized the large-scale tax and spending bill supported by Trump, which would increase the federal deficit and "run counter to what DOGE is currently advancing." Public opinion analysis suggests that as Musk "resigns," his differences of interest with Trump will become increasingly public, with some even believing that Musk may become an increasingly thorn in Trump's side.
Local time February 20, 2025, Oxon Hill, Maryland, Elon Musk holds up an electric saw from Argentine President Javier Milei, attending the Conservative Political Action Conference together with visual China.
Cutting expenses, poor results
According to DOGE, it has canceled more than 26,000 federal grants and contracts worth about $73 billion, and more than 260,000 government employees have been offered buyouts, early retirement, or dismissed. However, Reuters said that numerous budget experts and media reviews show that DOGE's announced data contains many errors, making it difficult for outsiders to verify them one by one.
The New York Times reported that DOGE's "black history" includes double-counting the same cuts, confusing "billion" with "million," and claiming to cancel contracts that have been ineffective for years. Moreover, some announced cuts by DOGE actually did not save any money for the federal government because they were overturned or put on hold by judges.
Reportedly, the situation depicted by the U.S. Treasury is somewhat more conservative than what DOGE promotes. Official data from the U.S. Treasury shows that federal government spending increased by 10% compared to the previous year during the first few months of Trump's second term, totaling about $250 billion. Even in the departments most affected by cuts, their expenditures are still higher than last year at present.
Reuters attributes one of the main reasons to factors Trump cannot directly control—increasing debt interest payments in the U.S., which rose by approximately 22% year-over-year and account for about one-seventh of federal government expenditures. Social security expenditures increased by 10%, reaching approximately $500 billion.
On the other hand, many of the cuts made by DOGE are not directly reflected in the accounts at present. For example, although thousands of employees have accepted buyouts, the government still needs to pay their wages until October. It is reported that after Trump took office, the federal government's spending on employee salaries actually increased by more than $3 billion. According to the Labor Department's seasonally adjusted estimates, the number of federal employees decreased by about 26,000 compared to January this April.
This part of the future savings still faces uncertainties. Martha Gimbel, executive director of Yale University's Budget Lab, said, "We may never rehire these employees again in the future, thus saving billions of dollars; but they may come back, and the costs could be even higher than before." Rachel Snyderman, a fiscal policy expert at the Bipartisan Policy Center, pointed out that if Trump's administration's budget proposals fail to gain congressional approval, the downward trend in agency spending may reverse.
Public disagreement, future as a thorn?
Last week, the Republican-controlled House of Representatives narrowly passed the "large and beautiful" massive tax and spending bill called by Trump. Musk then expressed dissatisfaction in an interview with CBS, saying that the bill would increase the federal deficit and "run counter to what DOGE is currently advancing."
The above bill extends the corporate and individual tax cuts passed by Trump in his first term, increasing the federal deficit by $3.8 trillion by 2034. Musk commented helplessly, "I think a bill can be 'big' or 'beautiful.' But I don't know if it can be both. This is my personal view."
White House spokesperson Leavitt stated that after Musk leaves, cabinet ministers under Trump will continue to work with DOGE employees, noting that "the leaders of DOGE include every member of the presidential cabinet and the president himself." However, Reuters bluntly stated that there remains to be seen how enthusiastically Trump's cabinet members will continue to streamline departments in the future.
Behind the public disagreement is the damage to Musk's commercial brands due to his cooperation with Trump. The Wall Street Journal pointed out on May 30th that Tesla's market value reached $1.5 trillion after Trump was elected president, but as Musk became more involved in government affairs, its market value subsequently halved. After news of Musk's return broke out, Tesla's market value surged back above $1 trillion.
Illustration by The Wall Street Journal
"Musk paid the price for his DOGE storm," The Financial Times evaluated on May 30th, stating that Musk's four-month "lightning action" in the U.S. government made him the most powerful businessman in Washington since the Gilded Age, but this storm did not enhance his personal reputation nor improve the image of his companies.
The report pointed out that during the early stages of Trump's presidency, Musk's enterprises also received obvious "attention," such as the dismissal of SpaceX's hiring discrimination lawsuit by the Biden administration, the suspension of investigations into his brain-computer interface company Neuralink by regulators, and Starlink being listed as a potential beneficiary of the $42 billion rural broadband project by Commerce Secretary Rettik. These actions led people to believe that his nearly $300 million spent during the Republican campaign was worth it.
During this period, Starlink successfully entered long-term markets such as India, Pakistan, and Vietnam, major companies increased their advertising investments on X, and multiple government contracts were signed. A missile defense system construction plan named "American Golden Dome" announced by Trump at the beginning of his presidency was also believed to potentially benefit SpaceX.
However, Musk's role in DOGE caused serious backlash for his electric vehicle and solar panel company Tesla. In addition to the stock price plunge, there were reports that the company's board attempted to remove Musk from his position as CEO, and several Tesla dealerships were set on fire by protesters.
The Financial Times pointed out that until recently, Tesla was Musk's main source of wealth, and its brand damage might be difficult to fully repair. "80% of Tesla's sales in the U.S. go to blue states (areas where Democratic supporters are predominant)," said a former Tesla executive. "Clearly, these voters were deeply offended."
The report said that due to Musk's political activities, Starlink lost lucrative contracts in Canada and Mexico, while X lost 11 million users in Europe alone. On the other hand, regulatory investigations into Tesla and SpaceX have yet to stop. Trump's planned policies to cancel electric vehicle tax credits and impose tariffs may further impact its car sales.
"(Musk) His departure once again indicates that his influence in Washington is waning." The New York Times recalled on May 30th, recalling that when Trump held his first cabinet meeting in February, Musk's power was obvious—as a "special government employee" with almost no formal power, he spoke before any cabinet minister.
However, in the following weeks, Musk's help decreased, and he became a source of controversial headlines considered harmful by Trump advisors. The report said that his social comments sparked controversy, particularly when he claimed to discover "massive fraud" in the social security sector, causing dissatisfaction among the president's advisory group.
The Financial Times believes that after shedding the constraints of being a "special government employee," Musk is increasingly likely to become a "thorn in Trump's side." Shortly after Musk announced his departure from DOGE, he criticized the White House's plan to cancel clean energy tax credits again. Fred Thiel, CEO of Bitcoin company MARA Holdings, said, "Roosevelt once said, 'Words like honey, sticks like clubs.' Perhaps Elon's approach differs slightly."
This article is an exclusive contribution from Guancha Observer and cannot be reproduced without permission.
Original: https://www.toutiao.com/article/7510257211118092834/
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