In an ambitious move led by tech mogul Elon Musk, the Department of Government Efficiency (DOGE) aims to reduce the federal deficit by $1 trillion. This initiative, supported by President Donald Trump, involves reviewing and cutting various government programs. The plan has already resulted in layoffs and closures of several departments. Despite the mathematical possibility of achieving this goal, practical challenges remain significant. Understanding how the government allocates its $6.8 trillion budget is crucial to assessing the feasibility of these cuts.

The Challenge of Reducing Mandatory Spending

Mandatory spending forms a substantial part of the federal budget, accounting for about 75% of total expenditures. Programs like Social Security, Medicare, and interest on the national debt are largely protected due to their automatic nature. These programs do not require annual approval from Congress, making them less vulnerable to immediate cuts. However, if Congress and the president decide to alter these programs, they can still be adjusted. Given President Trump's commitment to preserving Social Security and Medicare, along with his promise not to touch Medicaid, the options for reducing mandatory spending are limited.

To delve deeper into mandatory spending, it's important to note that while these programs operate on autopilot until Congress intervenes, they are not entirely untouchable. For instance, Social Security accounts for about 20% of the budget, Medicare for 15%, and interest on the federal debt for 12%. Veteran benefits and safety net programs also contribute significantly. If the administration wants to achieve its $1 trillion target without touching these major areas, it must look elsewhere. The challenge lies in balancing the need for deficit reduction with the protection of essential services that millions of Americans rely on.

Exploring Options in Discretionary Spending

Discretionary spending, which requires annual approval from Congress, offers more flexibility but comes with its own set of limitations. This category includes defense and non-defense programs, totaling around $1.8 trillion in 2024. Defense spending makes up roughly half of this amount, and given Trump's pledge to increase military funding, non-defense discretionary spending becomes the primary target for cuts. However, even eliminating all non-defense discretionary spending would fall short of the $1 trillion goal.

Non-defense discretionary spending encompasses a wide range of federal activities, including education, transportation, and environmental protection. Departments like Veterans Affairs, Health and Human Services, Homeland Security, and Education each play critical roles. Cutting these programs could have far-reaching consequences. For example, eliminating the entire non-defense discretionary budget would mean shutting down nearly every federal agency outside of defense, mandatory programs, and interest payments. Additionally, raising revenue through methods like tariffs or tax increases faces its own set of challenges, as these approaches may not yield the expected financial benefits and could harm the economy. In light of these complexities, finding a balanced approach to deficit reduction remains a daunting task.