The Fiscal Strategy of the Second Trump Administration
DOGE Initiative
The Department of Government Efficiency (DOGE) is not a formal cabinet department but a temporary organization established by Executive Order in January 2025, housed within the Executive Office of the President. Led by Elon Musk as a special government employee, DOGE has pursued an aggressive agenda to reduce federal spending through contract cancellations, workforce reductions, and deregulation.
DOGE has claimed approximately $160 billion in savings as of April 2025, though these figures lack independent verification and some analyses suggest the actual fiscal impact may be negative. DOGE's efforts have primarily targeted discretionary spending, with particular focus on eliminating programs related to diversity initiatives, climate change, and certain scientific research.
Congressional Budget Cuts
While DOGE operates through executive action, Congress is simultaneously pursuing much larger cuts through the budget resolution process:
- Medicaid: The House budget resolution instructs the Energy and Commerce Committee to cut $880 billion over the next decade from programs under its jurisdiction, with Medicaid being the primary target.
- SNAP (Food Assistance): The House Agriculture Committee has been directed to cut $230 billion, primarily from the Supplemental Nutrition Assistance Program.
- Other Programs: Housing assistance and other social programs face smaller but still significant cuts.
Tax Cut Extension
These spending cuts are being pursued primarily to help offset the cost of extending the 2017 Tax Cuts and Jobs Act provisions that are set to expire at the end of 2025:
- Permanently extending the TCJA would reduce federal tax revenue by approximately $4.5 trillion over the 2025-2034 budget window.
- Even with the claimed DOGE savings and the proposed congressional budget cuts, the tax cut extension would still significantly increase the federal deficit.
- Economic analyses indicate that the benefits of the tax cuts would disproportionately flow to higher-income households and corporations.
Strategic Connection
The relationship between DOGE and the tax cut extension reveals a strategic approach:
1. DOGE provides a visible, executive-driven narrative about fighting government waste and inefficiency.
2. This narrative helps build political support for the broader fiscal agenda, including tax cut extensions.
3. However, DOGE's actual savings ($160 billion claimed) represent only a tiny fraction of the cost of the tax cut extensions ($4.5 trillion).
4. The much larger cuts needed to partially offset the tax cuts are being pursued through the less visible congressional budget process, primarily targeting social safety net programs.
The Trump administration has insisted it will protect Social Security, Medicare, and Medicaid benefits while targeting waste and fraud. However, budget analysts note that the scale of cuts required to meaningfully offset the tax extensions would necessarily affect program delivery and access, regardless of how they are framed politically.
SNAP
The stark hypocrisy of America's current fiscal priorities is nowhere more evident than in the simultaneous push for DOGE's "efficiency" cuts, slashing of SNAP benefits for the hungry, and the generous preservation of agricultural subsidies flowing predominantly to wealthy farmers. While lawmakers demand $30 billion in cuts from food assistance that feeds millions of low-income Americans and trumpet DOGE's supposed $160 billion in government savings, these same fiscal conservatives fiercely protect the $41 billion in farm subsidies benefiting their districts and push to increase supports for specific Southern crops like cotton, peanuts, and rice. Many members of Congress who rail against "government handouts" for the poor have themselves received hundreds of thousands in farm subsidies through family operations, revealing a glaring double standard: government support is denounced as wasteful dependency when it feeds hungry families but celebrated as essential protection when it bolsters already-profitable agribusiness. This selective austerity, cutting holes in the safety net while extending trillion-dollar tax cuts that primarily benefit the wealthy and corporations, exposes the true agenda behind the "efficiency" narrative—not fiscal responsibility, but a redistribution of resources away from vulnerable Americans toward those who already hold significant wealth and power.
When examining the fiscal policies taking shape under the guise of "efficiency" and "fiscal responsibility," we see a consistent pattern where those with the least political power bear the heaviest burden. The proposed $30 billion in SNAP cuts would directly impact the most vulnerable Americans—children, elderly, disabled, and working poor families struggling to put food on the table. Meanwhile, wealthy agricultural interests with powerful lobbying presence maintain their subsidies, and corporations benefit from trillion-dollar tax extensions.
This power imbalance is also evident in how DOGE's cost-cutting measures primarily target programs serving marginalized communities while leaving untouched the structural advantages enjoyed by the wealthy and well-connected. The pattern extends beyond fiscal policy—it's reflected in regulatory rollbacks that remove protections for workers, consumers, and the environment while preserving advantages for corporate interests.
What makes this particularly troubling is how this predatory dynamic is often obscured by rhetoric about "personal responsibility" and "government waste," even as the same system transfers massive resources upward through tax policies, subsidies, and regulatory changes that primarily benefit those already holding significant economic and political power.
As the budget axes fall, they rarely strike at the privileges of the powerful, instead landing repeatedly on the services and protections that sustain those with the least ability to defend their interests in the corridors of power.
Musk
The evidence reveals a striking pattern of hypocrisy in how Musk's DOGE has approached government spending cuts while his own companies continue to benefit enormously from government contracts and subsidies.
According to a Washington Post analysis, Musk and his businesses have received at least $38 billion in government contracts, loans, subsidies, and tax credits over the years, with SpaceX and Tesla being the primary beneficiaries. Government contracts to SpaceX from NASA and the Defense Department make up the majority of these funds, while Tesla has earned $11.4 billion in regulatory credits from federal and state programs.
This government support has increased significantly in recent years. Over the last decade, Musk's companies SpaceX and Tesla were awarded at least $18 billion in federal contracts. Federal contracts to SpaceX doubled from $1.1 billion in 2020 to $2.2 billion in 2021, and reached $3.7 billion in 2024.
Almost two-thirds of the $38 billion in government funds were pledged to his businesses in just the past five years.
The conflict of interest is particularly glaring when examining DOGE's actions. While DOGE has been cutting programs across various agencies, including emissions reduction for Navy ships and equity-focused AI research, SpaceX has continued to secure major government contracts, including a recent $5.92 billion Space Force contract for national security space launches.
Defense Secretary Pete Hegseth has been making a show of canceling $580 million in Defense Department contracts and grants, but these cuts haven't affected Musk's SpaceX, which has actually seen an increase in Pentagon business.
When questioned about these potential conflicts of interest, the White House has indicated that Musk himself will determine when conflicts arise and remove himself from those situations. White House Press Secretary Karoline Leavitt stated, "If Elon Musk comes across a conflict of interest with the contracts and the funding that DOGE is overseeing, then Elon will excuse himself from those contracts."
The conflict extends to regulatory agencies as well. Agencies currently investigating Musk's companies, such as the SEC (which filed a lawsuit against Musk in January 2025) and the NLRB (which is considering cases against SpaceX and Tesla), have faced DOGE-driven staff reductions and disruptions. Even after Musk began his work at DOGE, NASA announced a $100 million contract to SpaceX in February 2025.
One political science professor at USC described Musk's "subsidy harvesting strategy" as his true genius, noting that he's now in a political position where he could potentially bolster that strategy further.
This pattern exemplifies a dynamic we have identified: while advocating for austerity and "efficiency" in government spending that affects vulnerable populations, Musk has carefully preserved and even expanded the government support that benefits his own enterprises. It's a perfect illustration of how power and access can be wielded to protect self-interest while imposing hardship on those with less influence in the corridors of power.