President Trump’s Department of Government Efficiency is perhaps the most welcome wake-up call for the federal government—and its obscene spending habits—in decades. It is refreshing to see many overpaid, underworked, often-vacationing federal employees fretting about whether their cushy jobs will disappear, and to see at least one branch of the federal government working to rein in our massive deficit spending. All of this is long overdue.
Yet it remains to be seen whether DOGE will help jump-start a serious and sustained effort to restore fiscal sanity, or whether its high-profile efforts will wrongly convince Americans that enough has been done, and that we can stop worrying that the federal government is bankrupting the country. If the former happens, it will be an extraordinary and much-needed development; if the latter, it will provide further evidence that, as Lincoln warned us nearly two centuries ago, if our republic is to be destroyed, it will be destroyed from within.
There are already signs that DOGE might not be able to deliver as much as originally promised.
Shortly before the election, Elon Musk said he thought it was possible to slice “at least $2 trillion” out of the current federal budget of roughly $7 trillion. Earlier this year, he said that “if we try for two trillion, we’ve got a good shot at getting one [trillion].” Last month, he told Fox News’s Bret Baier, “Our goal is to reduce the deficit by a trillion dollars,” or “to drop the federal spending from $7 trillion to $6 trillion.” If achieved, such a reduction might not be “the biggest revolution in government since the original revolution,” as Musk told Baier it might be, but it would still be a remarkable feat, cutting the deficit roughly in half. (Our national debt, however, would continue to rise, as the deficit—even if much lower—would add to our existing debt.)
DOGE’s prospects for success could hinge on how long Musk stays on the job. Recent reports suggest he might be leaving sooner rather than later. Trump reportedly told his cabinet members that Musk will be departing in a matter of weeks, which is consistent with reporting that he will leave “at the end of a 130-day stint as a special government employee” around the end of May. This would be a significant departure from what Musk told Fox Business host Larry Kudlow, who asked Musk on March 10, “You going to go another year?” and he replied, “Yeah, I think so.” White House Press Secretary Karoline Leavitt now vaguely says Musk will leave “when his incredible work at DOGE is complete.”
Without Musk, it’s hard to imagine DOGE sustaining the same momentum or hitting its lofty goal of cutting the federal deficit in half.
With or without Musk, however, there’s only so much DOGE can do. The branch of government on the other end of Pennsylvania Avenue—the one with the power of the purse—will eventually have to start doing its job. Congress has irresponsibly put so much federal spending on autopilot that we’re racking up historic deficits without legislators having to vote on most of that spending.
Just how out of control is our autopilot spending? Consider that the Congressional Budget Office says that in Fiscal Year 2025, the federal government will collect $5.163 trillion in tax revenues and will spend $952 billion on net interest payments on the debt and $4.228 trillion on so-called “mandatory” outlays for a total of $5.180 trillion in autopilot spending—spending that Congress doesn’t control through the usual appropriations process.
In other words, per the CBO, our autopilot spending alone will eat up all the revenues that the government collects this year, leaving it with a $17 billion shortfall. That’s a $17 billion deficit even before Congress votes to spend a single penny on such things as national parks, federal highways, or even national defense. So much for the Left’s claim that defense spending is fueling our deficits.
Nor are our deficits a result of the federal government’s having been too shy about taxing the American people. In real per capita dollars—which adjust both for inflation and for population growth—the federal government collected more than three and a half times as much money in 2021 as it did in 1947 (the first full fiscal year after World War II). It could have spent three times as much money per person—even in inflation-adjusted dollars—and still run a surplus. Instead, it spent nearly seven times as much. As should be clear to anyone not swimming in the federal swamp, our federal government has a massive spending problem.
Interest payments on the debt are now larger than our entire discretionary defense budget. So, if not for the profligate spending of prior generations, we could cover our defense costs with the money we now send to our creditors. Put another way, one out of every six dollars that Americans now pay in taxes essentially gets thrown into the trash—it goes to pay interest on the debt, not to buy anything. Americans would presumably like to have 17% of their tax bills back. By 2035, the CBO projects that 22% of Americans’ tax payments won’t go toward buying anything.
Most autopilot spending, however, doesn’t go toward interest payments on the debt. Most goes toward Social Security and, especially, federal health care programs like Medicare, Medicaid, and Obamacare. The former should be viewed very differently from the latter.
Social Security was designed with a dedicated revenue stream—Social Security payroll taxes—that has more than covered the program’s total costs over the past roughly 90 years. Yes, Social Security is expensive ($1.6 trillion this year), and it badly needs some relatively slight reforms—namely, slowly and incrementally raising the retirement age to reflect current demographic realities—to keep us from having to dip into general revenues to pay for it. But it’s not driving the deficit train.
Federal health care programs are the primary driver of our debt, as they are eating up huge and ever-increasing portions of our general tax revenues. This is because when President Lyndon Johnson spearheaded the passage of these Great Society programs and a Democratic Congress passed them into law, no one bothered to think much about how to pay for them. This is very different from Social Security. Indeed, only about one-third of Medicare’s costs are covered by Medicare payroll taxes, and none of Medicaid’s costs are covered through payroll taxes. This is why LBJ deserves the place of honor on the Mount Rushmore of debt.
Consider this stat (which my group, the American Main Street Initiative, highlighted in its Quick Hits): “The first year that Medicare spending visibly hit the books was 1967. From that point through 2020, Medicare and Medicaid cost a combined $17.8 trillion, while our combined federal deficits over that same span were $17.9 trillion. In essence, our deficit problem is a Medicare and Medicaid problem.”
As bad as that problem has been, however, it’s getting worse. In 1975, on the eve of the Bicentennial, we spent 7% of all federal tax revenues on Medicare and Medicaid combined. In 2025, on the eve of the Quarter-Millennial, we’re spending 31% of all federal tax revenues on just those two programs. By 2035, the CBO says we’ll be spending 35%—more than all discretionary spending combined, including all spending on defense, parks, highways, and everything else for which Congress appropriates funds through the usual budgetary process.
In the face of these federal health care programs’ escalating costs, federal debt held by the public—the portion of the national debt that really matters, as it doesn’t involve the federal government merely borrowing money from itself—is now a whopping 14 times higher, even after adjusting for inflation, than it was in 1974. Lest anyone think that debt numbers can only go in one direction, that’s after we had cut our debt held by the public in half, in inflation-adjusted dollars, from the end of Fiscal Year 1946 to the end of FY 1974. We were halfway to being debt-free. Then Medicare and Medicaid really kicked in, and our debt skyrocketed.
With autopilot spending now eating up more than 100% of our tax revenues, and with federal health care programs consuming the largest share of that autopilot spending, we won’t be able to get a handle on our runaway deficit spending until we get serious about reforming those health care programs. As things stand now, our autopilot is set to fly the country into the ground.
Efforts to reform federal health care programs are politically impossible so long as both political parties aren’t serious about tackling the problem. In recent years, Republicans have been only marginally serious about addressing the deficit, and Democrats have been almost wholly unserious about doing so. This wasn’t the case as recently as 25 or 30 years ago. In the late 1990s, during the last period in which the federal government actually balanced its budget, both parties discussed serious, bipartisan reforms to these programs. Such efforts generally involved some form of “premium support,” which would use private competition to keep public costs down. But as Politico reports, these efforts were largely derailed when President Clinton opposed them in an effort to shore up his left flank in the wake of his tryst with White House intern Monica Lewinsky.
To turn the debt battleship around, we need to revisit that late 1990s playbook.
The need to get our deficits and debt under control is obvious and pressing. As recently as 2008, when Barack Obama and Joe Biden were running as a ticket for the White House, the largest inflation-adjusted deficits on record were—as one would expect—those we ran up during the three full fiscal years of World War II (1943, 1944, and 1945; the Japanese bombed Pearl Harbor after FY 1942 was already underway). Those WWII deficits now rank 14th, 15th, and 16th on the all-time list—and they’ll fall another spot once FY 2025 is finished. That’s right—we now run higher annual deficits on a routine basis, even after adjusting for inflation, than we did while fighting a two-front world war.
This year’s deficit will more than double our highest deficit during WWII, and our deficits in 2020 and 2021 each more than quadrupled our highest WWII deficit—in fact, each surpassed our total deficit spending for the entire war. All of this is even after adjusting for inflation.
For those who prefer to look at debt as a percentage of the Gross Domestic Product—even though that partially masks the problem by only registering debt as increasing if it grows faster than the economy as a whole—the CBO writes of its projections over the next decade, “Debt held by the public rises each year,” “to 118 percent [of GDP] in 2035”—“surpassing its previous high of 106 percent of GDP in 1946” and reaching “an amount greater than at any point in the nation’s history.”
When Ross Perot ran for the presidency in 1992 and got 19% of the popular vote, largely by campaigning against profligate deficit spending under President George H.W. Bush, our national debt was $4 trillion. Thirty years later, it eclipsed $30 trillion. If it continues to rise at the same rate over the subsequent 60 years as it did during those 30, it will increase more than 50-fold and surpass $1.5 quadrillion. That’s how bad our deficit trajectory is—it can only be captured by using what sounds like a made-up number. (A quadrillion is a thousand trillions.)
So, we need DOGE—and hopefully Musk will stay on the job—but we also need a lot more than DOGE. We need serious statesmen to emerge to prevent a fiscal calamity.
Jeffrey H. Anderson is President of American Main Street Initiative, a think tank for everyday Americans, and was Director of the Bureau of Justice Statistics at the U.S. Department of Justice from 2017–2021.
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