Musk Celebrates 9% Cut in Federal Workforce as Spending Debate Persists

WASHINGTON — Elon Musk celebrated what he cast as the year-end success of his effort to shrink the federal workforce, citing data that show federal employment falling to 2.744 million in November from 3.015 million in January. The decline of roughly 271,000 workers includes about 154,000 who took buyouts and others who left through mass terminations that hit agencies such as the former USAID. "The matrix was reprogrammed," Musk tweeted, referencing a chart produced by Krit Chanwong, an economics researcher at the Cato Institute, and Alex Nowrasteh, the institute’s vice president for policy.

The drop in federal employment underscores a milestone that, by some measures, has not been seen since the large postwar demobilizations following World War II and the Korean War. Musk, who has rekindled his relationship with President Trump after a rift earlier this year, has led DOGE’s push to streamline the government. Musk was pictured in the Oval Office with Trump in February, a moment cited by supporters as a sign of closer collaboration on cost-cutting aims.

But the same Cato scholars who highlighted the workforce decline tempered their assessment on spending. They wrote that DOGE did not translate into lower federal outlays, noting that most federal spending goes to entitlement programs whose costs remain high despite policy tweaks. "An observer who did not know when DOGE started could not identify it in [monthly spending charts]," Chanwong and Nowrasteh wrote. They added that DOGE "failed to cut spending because most federal spending was for entitlement programs where spending remains high due to structural reasons and policy autopilot." The researchers stressed that Congress, not the administration, holds the authority to reform many of those programs, making substantial cuts difficult to realize through executive-led efforts alone.

The spending picture, as of November, shows the federal government has spent about $7.6 trillion in 2025, according to Treasury Department data analyzed by the Cato scholars. That totals tops the $7.412 trillion spent in the same period in 2024 and exceeds the pace of spending in 2023 ($6.5 trillion), 2022 ($6.27 trillion) and 2021 ($6.5 trillion). Analysts cited higher interest rates, which spiked in 2022 amid inflation and have declined gradually, as a contributing factor to the larger outlay. Former President Trump has said he would appoint a new Federal Reserve chair in May who would pursue rate cuts, arguing that lower rates would save the government money given that roughly 17% of federal spending goes toward servicing the national debt.

The spending trajectory has not been matched by a similar reduction in outlays tied to foreign aid programs. Chanwong and Nowrasteh noted that changes in spending during DOGE’s tenure coincide with rescission actions in 2025, including a July move that cut $9 billion in previously appropriated funding for foreign aid, NPR and PBS, and a September pocket rescission that trimmed about $5 billion in foreign assistance without a full congressional vote. This context has drawn pushback from watchdogs who say entitlement programs and debt service dominate the federal budget, limiting the impact of personnel cuts on overall spending.

Human impacts of policy choices remain visible in communities touched by aid reductions. Former USAID workers held a vigil outside a government facility to mourn the changes to foreign assistance programs.

Despite the headlining payroll decline, observers caution that long-term spending pressures persist. Analysts say the workforce shrinkage may reflect efficiency efforts or a reorganization, but meaningful reform of entitlement programs and the national debt will require sustained congressional action and new policy frameworks rather than one-off personnel cuts. As lawmakers debate budget priorities, the question remains whether staffing reductions alone will translate into durable fiscal relief or whether structural reforms to major entitlement programs will be necessary to bend the long-term trajectory of federal outlays.