Elon Musk’s DOGE Cuts Fail to Cease US Spending from Hitting Report, Newsweek.
As an alternative for a $2 trillion enhance in tax earnings, repeal the 2017 tax break. It would hit the higher 10% in earnings the toughest.
Aggressive effectivity push didn’t curb hovering federal spending, which hit a document $603 billion final month, in keeping with new U.S. Treasury knowledge.
Musk’s Division of Authorities Effectivity (DOGE) claims to have saved over $100 billion, but just a few federal departments noticed spending reductions in President Donald Trump‘s first full month.
Why It Issues
Trump charged Musk with rooting out federal authorities waste and corruption when he returned to workplace in January, however DOGE has been closely criticized for blunders involving reducing essential staffing and packages. Musk has touted large financial savings, however some consultants have stated they’re tiny in comparison with the general federal funds.
The Abstract of Price range and Off-Price range Outcomes and Financing of the US Authorities February 2025
Web page 5
Receipts and Outlays of america Authorities. For Fiscal 12 months 2025 By February 28, 2025, and Different Durations
What To Know
Total spending rose by $40 billion, a 7 p.c enhance in comparison with the identical month final yr.
In response to the Treasury Division’s month-to-month assertion for February, direct spending surged by $29 billion in comparison with the identical month final yr. That is primarily attributable to a $10 billion enhance in debt servicing, which reached $86 billion, and a $14 billion rise in tax credit and associated funds.
Information of elevated spending comes after Musk and DOGE gained entry to a number of federal authorities businesses, reported overspending and alleged corruption—and subsequently canceled contracts and fired or suspended tens of hundreds of staff.
The DOGE web site estimates it has saved every taxpayer round $652.17 to date, at a complete of $105 billion.
Determine 8 particulars Month-to-month Outlays of the US Authorities for fiscal 2024 and a partial of fiscal yr 2024
Musk has promised persevering with efforts to chop spending, with stories of trying to lower companies on the Social Safety Administration and the shuttering of an inexpensive housing program among the many newest updates on Wednesday.
DOGE has come beneath growing criticism for its sweeping strikes, together with from throughout the Republican Occasion. Trump advised the Tesla and House X proprietor in entrance of his Cupboard to make use of a “scalpel” fairly than a “hatchet” when making strikes to chop staffing.
On Tuesday, the U.S. Home of Representatives handed its stopgap funding bill, which trims $13 billion in non-defense spending from the 2024 funds whereas growing protection spending by $6 billion. With an general discretionary spending high line of practically $1.7 trillion, the invoice doesn’t have an effect on Social Safety or Medicare, that are funded individually.
What Folks Are Saying
Maya MacGuineas, president of the Committee for a Accountable Federal Price range, in a information launch: “The Treasury Division confirmed at the moment that we now have borrowed a complete of $1.1 trillion within the first 5 months of the fiscal yr – or practically $8 billion a day. What wants no affirmation is that we’re nearly midway by means of the fiscal yr and but we now have performed nothing in the best way of constructing progress towards getting our skyrocketing debt beneath management.
“Despite our debt approaching a record share of the economy and interest payments on track to exceed our defense spending – totaling $396 billion to date this year, and on track to reach $952 billion – we are not doing anything to change course. Lawmakers should use these numbers as a wakeup call on the reality of our unsustainable fiscal situation and get to work on putting in place a comprehensive plan to stabilize and bring our debt down to sustainable levels. For the sake of our economy and national security, the time to act is now.”
Chris Edwards, Kilts Household Chair in Fiscal Research on the Cato Institute, advised Newsweek: “The newest knowledge present huge federal deficits persevering with, and neither celebration is taking the specter of the approaching fiscal disaster significantly. The president’s DOGE effort—centered on firing federal staff and reducing wasteful grants—to date has not generated sufficient financial savings to make a dent on out-of-control federal deficits. Congress must act if it needs to achieve success. It must terminate spending packages and cut back advantages within the big entitlement packages.
Congress ought to lower $180 billion yearly of company welfare subsidies, and it ought to begin phasing out grants to state governments, which value over $1 trillion yearly. DOGE has raised the difficulty of waste in authorities. However deficits are so huge that entire packages must be eradicated, not simply the apparent waste.”
Almost two months into Trump’s second time period within the White Home, it might nonetheless be too early to see the actual impression of federal spending cuts by DOGE, however these supportive of Musk’s work will likely be eager to see greater outcomes sooner fairly than later.
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Everyone seems to be blaming spending. Lets step again to what occurred in 2017. The 2017 Tax Cuts and Jobs Act didn’t pay for itself during the last 10 years. Additionally there’s the small matter of it passing utilizing Reconciliation which insists it pay for itself (being redundant right here). It didn’t and I’m once more being redundant.
The repeal of it impacts these within the higher 10% (or increased brackets) of the taxpayers and extra so the 1 percenter who make up 1,000,000 (taxpayers) or barely extra taxpayers having earnings far higher than the bottom ten percenter. Lest we overlook, firms, the administration, and their stockholders have a lot to lose if the 2017 Tax Cuts and Jobs Act is repealed.
It isn’t simply excessive rollers corresponding to Jamie getting nervous. It’s Companies and all of the stockholders home and overseas who’ve a lot to lose. However then once more, this tax break ought to by no means have occurred. Occasion line vote with 12 Repubs within the Home becoming a member of Dems plus one Repub Senator.
The company tax charge would revert again to 35% from 21% (CEPR or Brookings). Jamie would lose a few of his bonus going ahead.
I consider that is the place the affect to sh*t-can Pres Biden is coming from at the moment.
Within the run-up to the regulation’s passage, Trump and his main financial advisers claimed that the advantages of the invoice would trickle down, leading to substantial beneficial properties for U.S. staff and their households and for the U.S. financial system as a complete. Critics on the time argued that these claims have been unlikely to come back to move. Now, greater than six years later, there’s little proof that the regulation’s pricey company tax cuts delivered development or improved well-being for the overwhelming majority of the nation’s workforce. As an alternative, the regulation supplied the biggest tax cuts to the rich and worthwhile firms, exacerbated inequality, and eroded revenues that would in any other case have been used to deal with nationwide priorities.
And the pundits are speaking about spending? Lets look and see the place these tax breaks went.
The advantages of the company tax reductions have been much more skewed towards the rich than these of the invoice as a complete.5 The highest 1 p.c of the earnings distribution obtained a full third of the company tax discount however 20 p.c of the discount from all the measure’s provisions. (see Determine 2) The center quintile of the earnings distribution obtained 8.2 p.c of the good thing about the enterprise reductions and 11.2 p.c of these from the invoice as a complete.
Overseas homeowners of fairness in U.S. firms additionally benefited from the measure’s enterprise tax cuts. New analysis by economists on the Joint Committee on Taxation and the Federal Reserve Board of Governors estimates that barely greater than $1 out of each $6—17 p.c—of the beneficial properties from the company tax cuts flowed to international homeowners.
Repair the rattling downside and let the 2017 tax breaks expire.
Large Shock . . . The TCJA’s company charge cuts didn’t trickle right down to peculiar staff
Throughout debate over the tax invoice, Trump administration financial officers claimed that “the average household would, conservatively, realize an increase in wage and salary income of $4,000” from the TCJA’s mixture of a decrease company tax charge and the power to instantly write off nonstructure investments. Kevin Hassett, the chair of the Council of Financial Advisers on the time of the invoice’s passage, went even additional and predicted that common family earnings might rise as a lot as $9,000 per yr because of the tax bundle. Whereas critics on the time expressed doubts about these claims, proponents argued that the advantages of the tax lower would trickle right down to peculiar staff because of companies growing funding; this, in flip, would result in increased productiveness and better wages.
Necessary analysis first revealed in 2022 by authors affiliated with the Joint Committee on Taxation and Federal Reserve Board that matched company tax returns with info returns for companies’ shareholders and staff discovered that the advantages of the TCJA’s company tax reductions didn’t trickle down. In truth, the examine discovered that “earnings do not change for workers in the bottom 90% of the within-firm distribution, but do increase for workers in the top 10%, and increase particularly sharply for firm managers and executives.”
The economists additionally famous that govt pay hikes have been solely weakly correlated with gross sales, earnings, or gross sales development and “are not clearly linked to stronger firm performance.”
I’m not going to put up your entire commentary I put up in December 2024, You may learn it right here:
“Why Should the 2017 Tax Cuts and Jobs Act be Trashed,” Indignant Bear.
This can be a what the ??? second, Information retailers are blaming the inhabitants for the prices of the 2017 tax breaks. It belongs to Trump. Repeal the 2017 tax breaks and there’s $2 trillion in income.
