The Trump administration’s DOGE cost-cutting effort led by tech mogul Elon Musk claims to have saved more than $100 billion so far, largely through canceled contracts and workforce reductions. The details on those savings are anything but clear, though, and skeptical analysts have found DOGE’s claims riddled with inaccuracies and inflated numbers, leading some to wonder just how much money the Musk team is really capable of saving as it chaotically slashes its way through the federal government. A new study from the Budget Lab at Yale raises an even more troubling question: What if DOGE actually costs more than it saves?
Analysts at the Budget Lab, a non-partisan policy research group at Yale University, took a look at how revenues would be affected by one notable goal of the DOGE project: severe cuts at the IRS. With the Trump administration reportedly considering staff cuts of as much as 50% at the tax agency, the analysts found that such a reduction would mean the IRS collects $395 billion less over 10 years due to reduced capacity. The layoffs would save about $45 billion over the same period, resulting in a net loss of $350 billion.
The researchers said there is good reason to think that a smaller, weaker IRS would lead to an increase in noncompliance among taxpayers. Adding that factor to the analysis boosted the potential losses significantly, to $2.4 trillion over 10 years.
Those losses stand in stark contrast to the Biden administration’s effort to bolster the IRS with $80 billion in extra funding over a decade, with the money being used to modernize the agency’s technology, boost customer service and add agents targeting tax cheating by corporations and high-income households. In the Budget Lab analysis, that effort — which was resisted by Republicans, who managed to reduce the budget enhancement significantly — would have increased revenues collected by $637 billion over 10 years.
On Friday, the Treasury Department said it will pause the overhaul of the IRS initiated during the Biden administration. Earlier in the week, The Washington Post reported that the DOGE team at the IRS has told the acting head of the tax agency to eliminate 18,000 jobs, or about 20% of its workforce.