Former President Donald Trump’s billionaire supporter Elon Musk suggested that he could cut $2 trillion from the federal budget during a campaign rally.
Brian Riedl, a senior fellow at the Manhattan Institute think tank, called it “a random number unattached to reality.”
The federal government spent $6.75 trillion in fiscal year 2024, which was more than it collected in revenue, resulting in a deficit of $1.8 trillion, according the U.S. Treasury Department. Congress has run a deficit every year since 2001. In the past 50 years, the federal government has ended with a fiscal year-end budget surplus four times, most recently in 2001.
Trump has suggested that he could pick Musk, the CEO of Tesla, to lead a government efficiency commission. When asked on stage how much he though he could cut from the federal budget, Musk responded “at least $2 trillion.”
Not everyone thinks that’s possible.
“The idea that you can eliminate one-third of the federal government without any backlash is fantasy,” Riedl said.
Musk’s $2 trillion figure presents clear challenges. Congress approved $1.7 trillion in total discretionary spending in fiscal year 2024. Much of the rest is considered direct spending or mandatory spending, which is mandated by existing laws. Of that $1.7 trillion in discretionary spending, Congress usually dedicates about half of that total to the U.S. Department of Defense.
Mandatory funding includes money for entitlement programs such as Medicare and Social Security and other payments to people, businesses, and state and local governments. For example, the Social Security Act requires the government to provide payments to beneficiaries based on the amount of money they’ve earned and other factors.
Riedl said the U.S. government surely has waste, fraud and abuse, but many of those problems have proven intractable. Lawmakers have tired again and again to fix such issues to no avail.
The U.S. Government Accountability Office estimated annual fraud costs taxpayers between $233 billion and $521 billion annually, according to a 2024 report. The fraud estimate’s range represents 3% to 7% of average federal obligations. The estimate was based on data from fiscal years 2018 through 2022.
The government obligated almost $40 trillion from fiscal years 2018 through 2022, but had no reliable estimates of fraud losses.
The GAO used a probabilistic method to estimate a range of outcomes under different assumptions and scenarios where there was uncertainty.
The White House Office of Management and Budget openly criticized the GAO report. Jason Miller, the deputy director for management at the Office of Management and Budget, detailed OMB concerns in a 3-page letter to officials with the Government Accountability Office. He said the fraud estimate was “not plausible.”
