Many families keep a meticulous budget of their household finances. They track how much the working residents earn, where the dollars and cents are going, and what spending can be eliminated to improve the fiscal house. This type of thinking should be adopted by public officials, correct? Despite the perpetual handwringing about better financial management in Washington, nothing changes – and it remains to be seen if the Department of Government Efficiency (DOGE) can be America's money savior.
$7 Trillion in Spending – But What Does It Buy?
The US government is poised to spend more than $7 trillion in fiscal year 2025. According to the Congressional Budget Office (CBO), federal outlays will exceed $10 trillion by 2033. The public is aware of the headline figures, such as $4 trillion in programs like Social Security and Medicare or $1 trillion in net interest payments. But what about the nitty-gritty? Nobody knows, says a new report.
The Government Accountability Office (GAO), a congressional research arm, recently published its annual Financial Report of the US government in collaboration with the Treasury Department and the Office of Management and Budget (OMB). The yearly overview of federal finances examines assets, costs, revenues, and sustainability by auditing financial statements.
It concluded that the federal government needs to combat "serious deficiencies" in fiscal management and return to a long-term sustainable fiscal path. The GAO highlighted four areas to address: “Serious financial management problems at the Department of Defense,” “Problems in accounting for transactions between federal agencies,” "Weaknesses in the process for preparing the statements,” and "Inadequate support for the cost of Small Business Administration and Department of Education loan programs."
"The federal government has again come up short in managing its finances and achieving a clean audit due to challenges in adequately supporting its costs, revenues, assets and liabilities," said US Comptroller General Gene Dodaro in a statement. "These serious financial management weaknesses and [the] unsustainable long term fiscal path further underscore the need for urgent attention, accountability, and transparency."
Additionally, Dodaro encouraged Congress and the executive branch to coalesce and produce "a plan for long-term fiscal sustainability."
The Pentagon, Dodaro says, appears to be enduring a broad array of financial management issues. In November 2024, as The Center Square noted, the Defense Department confirmed that it failed its seventh consecutive annual audit as it could not account for its nearly trillion-dollar budget last year. The Pentagon does not expect to pass an independent audit of its accounting systems until 2027.
In April 2023, Jon Stewart sat down with former Deputy Defense Secretary Kathleen Hicks, talking about failed audits and struggling rank-and-file members. Rather than engage in a forthright discussion, Hicks essentially shrugged and laughed off Stewart’s concerns, urging him to focus on other topics instead of “the dollars which really bother you.”
DOGE to the Rescue?
President Donald Trump officially established a special commission called the Department of Government Efficiency, tasked with cutting federal spending. The litany of executive orders contains various directives, such as giving "advice and guidance from outside of government" and launching doge.gov. “To restore competence and effectiveness to our federal government, my administration will establish the brand new Department of Government Efficiency," Trump said in his inaugural speech.
While there are still many uncertainties, the department's objective at the onset was to cut $2 trillion of spending, which Elon Musk later watered down to $500 billion. Still, something is better than nothing.
DOGE is still in its infancy, but it is ostensibly yielding early results. The widely watched US Debt Clock features a "D.O.G.E. CLOCK" widget, highlighting $10.9 billion in savings (as of 9 a.m. on Jan. 23). It is unclear how accurate the figure is, but the website notes that the constantly updated number is based on a "real-time savings objective from reducing government waste, fraud and abuse in federal government agencies."
Deficits to the Moon
When the president’s Tax Cuts and Jobs Act (TCJA) was enacted in 2018, politicians, economists, and think tanks warned that it would result in lower revenues. Today, even the CBO asserts extending the TCJA would not only hemorrhage the federal budget but could also weigh on growth prospects because government borrowing will chisel away at private capital investment. And yet, several years later, the United States is generating near-record receipts. Once again, the US government does not have a revenue problem – $5.163 trillion this fiscal year – but a spending problem – $7 trillion (or more) in FY 2025 – and one side of the political aisle ignores this during their grandstanding throughout congressional hearings. When the government takes in nearly $90 trillion over ten years, it is unfathomable to believe Uncle Sam requires more taxpayer money.
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