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Published : 27 Feb 2025, 09:27 AM
The US government spent more during President Donald Trump's first month in office than it did during the same period a year ago, in a sign his cost-slashing effort has yet to reduce the nation's heavy fiscal obligations, a Reuters analysis of federal data shows.
Trump has frozen billions of dollars in foreign aid and fired more than 20,000 federal workers since he returned to power last month. His budget-cutting point person, tech billionaire Elon Musk, claims to have saved tens of billions of dollars.
But any savings have been outweighed so far by higher spending on health and retirement programs and rising interest payments, Treasury Department spending records show.
Overall, the government spent about $710 billion between Jan. 21 and Feb. 20, Treasury daily spending data shows, up from the roughly $630 billion during a comparable period last year.
Independent budget experts said the figures illustrate the relentless pressures incurred by an aging population and a ballooning debt load.
"Our $7 trillion budget is driven by structural imbalances because we've over-promised in our retirement and health care programs compared to what we're taking in," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "We've borrowed in good times and bad times, which has led to record debt levels."
The White House said Musk's Department of Government Efficiency is following through on Trump's promise to cut wasteful and fraudulent spending.
"DOGE has already identified billions of dollars in savings for American taxpayers, and President Trump will continue to direct this effort until our government is truly for the people, and by the people," White House spokeswoman Karoline Leavitt said.
Musk and Trump have said they aim to reduce the $6.7 trillion federal budget by $1 trillion, but Trump has also promised not to reduce benefits for seniors who get Social Security retirement payments and participate in the Medicare health plan.
Those two programs accounted for more than one third of federal dollars spent in the last fiscal year. While they are projected to eat up more of the budget as the population ages, trimming them would anger millions of Americans.
"There is no way to meet their goals without hitting the third rail," said Lauren Bauer, a researcher at the Brookings Institution who tracks the Treasury Department's daily spending statements.
Musk has said he will scrutinize both programs for fraud, but his attempts to scrutinize sensitive payment and personnel records have raised security and privacy fears. On Wednesday, 21 career workers in DOGE resigned in protest, saying the agency had mishandled Americans' private data.
Trump can do little to reduce debt service payments, which accounted for 13% of the budget last year, without risking a default that would rattle the global financial system.
The government paid about $94 billion in interest payments during Trump's first month, compared to around $80 billion in the comparable period last year, Treasury data shows.
DOGE REVISES SAVINGS CLAIMS
Musk's cost-cutting operation claimed last week that it had saved $55 billion through canceled contracts and property leases, but has since appeared to acknowledge that many of the cuts saved less money than originally claimed.
An update released on Tuesday had either removed or lowered the cost savings for 170 contracts by a total of roughly $3 billion, a Reuters examination found. Savings on one USAID contract, for example, dropped from almost $655 million to 35 cents.
Trump and Musk's most dramatic budget-cutting efforts to date have focused on a much smaller portion of the budget. He has effectively dismantled the US Agency for International Development, which spent $42 billion in the 2023 fiscal year, equal to 0.6% of the budget.
He has also thinned the ranks of the US civil service through a buyout program and mass layoffs that so far have affected about 100,000 of the nation's 2.3 million federal civilian workers. Any payroll savings have yet to materialize. Personnel costs equaled 4.3% of total spending in the 2022 fiscal year.
An attempt to freeze domestic aid spending has been blocked in court for now.
