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CNN
3 days ago
- Business
- CNN
Analysis: Scorecard: How Musk and DOGE could end up costing more than they save
Rather than set government straight, Elon Musk is leaving Washington with the federal budget all cattywampus. Deficit spending is increasing, not waning, and there is a growing school of thought that his 'efficiency' effort could end up costing the government as much as or more than it saved. The Tesla and SpaceX CEO came to Washington with a cut-till-it-hurts mindset and carte blanche from President Donald Trump. Musk quickly dialed back his campaign-trail bravado of cutting $2 trillion from the federal budget, but as recently as a Fox News interview in March, he said that by the time he left government, his Department of Government Efficiency 'will have accomplished most of the work required to reduce the deficit by a trillion dollars….' Instead, Musk will leave government work 'disappointed' that the Republicans he helped put in power are working to pass a bill that is estimated to add some $3.8 trillion in deficit spending and which Trump calls 'big' and 'beautiful.' There's no accounting trick to correct that imbalance. The budget is trillions out of whack, and the shock-and-awe campaign Musk and Trump imposed across the federal workforce has led to some serious PTSD for federal workers and contractors while claiming only to have saved $175 billion. That's not chump change, but it's not going to radically reform the US government. What's listed on the still-rudimentary DOGE website is also not an accurate reflection of what the group might actually have accomplished. DOGE will live on in the White House, 'like Buddhism' without Buddha, Musk has said, and CNN has reported that more cuts are planned after his departure. But the pace of DOGE activity has slowed, at least as reflected on its website. Musk's departure is an opportunity to consider whether the Department of Government Efficiency has lived up to its name. CNN's Casey Tolan is among the reporters who have been trying to match what DOGE claims to have saved or cut with what has actually been trimmed. Picking apart the 'estimated savings' of $175 billion on the DOGE website, Tolan told me that less than half that figure is backed up with even the most basic documentation. That means it's possible only even to start investigating about $32 billion of savings from terminated contracts, $40 billion of savings from terminated grants and $216 million of savings from terminated leases that DOGE claims. Plus, some of the specific terminations that are included in those numbers have no details at all. And Tolan has reported on the fact that DOGE's tally has 'been marred by various errors and dubious calculations throughout the entire time they've been releasing this info.' Probably not. The figure is based on '161 million individual federal taxpayers,' according to the DOGE website, which drastically undercounts taxpayers in the US. That 161 million figure is more likely a reflection of individual tax returns and would not reflect married people who file jointly, according to Betsey Stevenson, a former chief economist at the US Department of Labor during the Obama administration who is now a professor at the University of Michigan. 'This distinction is about trying to get that number as large as possible. If instead it was expressed as per American then it would be $514,' and only if you assume DOGE has saved $175 billion, which it probably has not, she told me in an email. Workers who generated revenue from the government have been fired, Stevenson points out. For example, staffing cuts at the IRS will mean the US brings in less revenue — but so will operating national parks short-staffed. Plus, a universe of litigation related to DOGE's efforts to cancel contracts and fire workers seemingly without cause is percolating through courts. 'In total, estimates suggest that what has been spent to generate these cuts may be as great as the cuts. In the long run, it's not clear that DOGE generated any savings,' she said. Max Stier, CEO of the Partnership for Public Service, has estimated in a back-of-the-envelope way that DOGE cuts could end up costing the US $135 billion simply because it will need to retrain and rehire elements of the work force that have been let go. The federal workforce is literally in trauma — something Trump's director of the Office of Management and Budget, Russ Vought, said was an aim of his. Stier estimates the federal workers will be much less productive after DOGE's efforts, for a variety of reasons. Workers are now worried about losing jobs; their morale is depleted; they are distracted from their work; and many top performers are being reassigned or are leaving entirely. In a previous interview, Stier described the DOGE effort to me as 'arson of a public asset.' We probably can't, according to Nat Malkus, a senior fellow at the American Enterprise Institute who has tried to keep track of DOGE's accounting for its cuts. While Musk has promised maximum transparency, it has been impossible to verify much of what DOGE has said it has done. 'We expect the government to show receipts,' Malkus told me in a phone interview. 'And the receipts that DOGE has shown that are posted publicly are nonetheless woefully inadequate to back their claims,' he said. Far from fundamentally changing government, the savings DOGE claims won't actually be realized unless and until Congress, which has the power of the purse in the Constitution, passes a rescission bill to claw back the funding. 'So far, we've just canceled contracts,' he said. 'The money is still spent because Congress spends the money.' The DOGE effort has certainly changed the tenor of the conversation around government spending. Its aggressiveness came as a shock to many Americans. 'They have shown that they're willing to inflict pain in the pursuit of reducing government expenditures,' Malkus said, adding that most Americans think the government spends too much money. 'That resolve is something rare and potentially valuable,' Malkus said. DOGE also brought in a tech mindset of cutting more than is necessary with the aim of building back, something that could be argued occurred with the rehiring of nuclear safety workers, for instance, or the reinstatement of certain contracts. Jessica Tillipman, an expert in government procurement law at George Washington University, is troubled by the idea that the government has gone from being the best business partner to one contractors approach with caution. 'The government's not acting like a good business partner right now,' Tillipman said. 'They're squeezing contracts that have been fairly negotiated between the government and contractors.' It's always possible DOGE could end up reforming government in positive ways, but the evidence is not yet there, Tillipman said. 'What have we seen? You require everybody to come back to work and you don't have office space,' she said as one example. 'You have people doing work that they're not trained to do. You have talent drains,' Tillipman said, pointing out that most of the government firings so far were among recently hired workers often brought on with a particular expertise. 'Half the training programs for the government have been canceled, so these pipelines that the government spent decades working on to make sure that there's a steady supply and the government's an attractive place for high-quality talent have gone away.' The long-term effect of those changes will not be clear for some time. 'There's a long way to go before this is going to actually shift the way agencies work,' Malkus said. 'It just takes longer than four months.' Stevenson pointed out that despite everything DOGE claimed to do, government outlays are on track to rise by 9% in 2025 compared with 2024. That's because Americans are living longer and drawing more from programs like Medicare and Social Security. It's those programs that are driving the deficit and debt, not the discretionary spending Musk targeted. 'Chainsaws and bluster can't solve the yawning gap between revenue and spending that has led American debt to rise to unsustainable levels,' Stevenson said.
CNN
3 days ago
- Business
- CNN
Analysis: Scorecard: How Musk and DOGE could end up costing more than they save
Rather than set government straight, Elon Musk is leaving Washington with the federal budget all cattywampus. Deficit spending is increasing, not waning, and there is a growing school of thought that his 'efficiency' effort could end up costing the government as much as or more than it saved. The Tesla and SpaceX CEO came to Washington with a cut-till-it-hurts mindset and carte blanche from President Donald Trump. Musk quickly dialed back his campaign-trail bravado of cutting $2 trillion from the federal budget, but as recently as a Fox News interview in March, he said that by the time he left government, his Department of Government Efficiency 'will have accomplished most of the work required to reduce the deficit by a trillion dollars….' Instead, Musk will leave government work 'disappointed' that the Republicans he helped put in power are working to pass a bill that is estimated to add some $3.8 trillion in deficit spending and which Trump calls 'big' and 'beautiful.' There's no accounting trick to correct that imbalance. The budget is trillions out of whack, and the shock-and-awe campaign Musk and Trump imposed across the federal workforce has led to some serious PTSD for federal workers and contractors while claiming only to have saved $175 billion. That's not chump change, but it's not going to radically reform the US government. What's listed on the still-rudimentary DOGE website is also not an accurate reflection of what the group might actually have accomplished. DOGE will live on in the White House, 'like Buddhism' without Buddha, Musk has said, and CNN has reported that more cuts are planned after his departure. But the pace of DOGE activity has slowed, at least as reflected on its website. Musk's departure is an opportunity to consider whether the Department of Government Efficiency has lived up to its name. CNN's Casey Tolan is among the reporters who have been trying to match what DOGE claims to have saved or cut with what has actually been trimmed. Picking apart the 'estimated savings' of $175 billion on the DOGE website, Tolan told me that less than half that figure is backed up with even the most basic documentation. That means it's possible only even to start investigating about $32 billion of savings from terminated contracts, $40 billion of savings from terminated grants and $216 million of savings from terminated leases that DOGE claims. Plus, some of the specific terminations that are included in those numbers have no details at all. And Tolan has reported on the fact that DOGE's tally has 'been marred by various errors and dubious calculations throughout the entire time they've been releasing this info.' Probably not. The figure is based on '161 million individual federal taxpayers,' according to the DOGE website, which drastically undercounts taxpayers in the US. That 161 million figure is more likely a reflection of individual tax returns and would not reflect married people who file jointly, according to Betsey Stevenson, a former chief economist at the US Department of Labor during the Obama administration who is now a professor at the University of Michigan. 'This distinction is about trying to get that number as large as possible. If instead it was expressed as per American then it would be $514,' and only if you assume DOGE has saved $175 billion, which it probably has not, she told me in an email. Workers who generated revenue from the government have been fired, Stevenson points out. For example, staffing cuts at the IRS will mean the US brings in less revenue — but so will operating national parks short-staffed. Plus, a universe of litigation related to DOGE's efforts to cancel contracts and fire workers seemingly without cause is percolating through courts. 'In total, estimates suggest that what has been spent to generate these cuts may be as great as the cuts. In the long run, it's not clear that DOGE generated any savings,' she said. Max Stier, CEO of the Partnership for Public Service, has estimated in a back-of-the-envelope way that DOGE cuts could end up costing the US $135 billion simply because it will need to retrain and rehire elements of the work force that have been let go. The federal workforce is literally in trauma — something Trump's director of the Office of Management and Budget, Russ Vought, said was an aim of his. Stier estimates the federal workers will be much less productive after DOGE's efforts, for a variety of reasons. Workers are now worried about losing jobs; their morale is depleted; they are distracted from their work; and many top performers are being reassigned or are leaving entirely. In a previous interview, Stier described the DOGE effort to me as 'arson of a public asset.' We probably can't, according to Nat Malkus, a senior fellow at the American Enterprise Institute who has tried to keep track of DOGE's accounting for its cuts. While Musk has promised maximum transparency, it has been impossible to verify much of what DOGE has said it has done. 'We expect the government to show receipts,' Malkus told me in a phone interview. 'And the receipts that DOGE has shown that are posted publicly are nonetheless woefully inadequate to back their claims,' he said. Far from fundamentally changing government, the savings DOGE claims won't actually be realized unless and until Congress, which has the power of the purse in the Constitution, passes a rescission bill to claw back the funding. 'So far, we've just canceled contracts,' he said. 'The money is still spent because Congress spends the money.' The DOGE effort has certainly changed the tenor of the conversation around government spending. Its aggressiveness came as a shock to many Americans. 'They have shown that they're willing to inflict pain in the pursuit of reducing government expenditures,' Malkus said, adding that most Americans think the government spends too much money. 'That resolve is something rare and potentially valuable,' Malkus said. DOGE also brought in a tech mindset of cutting more than is necessary with the aim of building back, something that could be argued occurred with the rehiring of nuclear safety workers, for instance, or the reinstatement of certain contracts. Jessica Tillipman, an expert in government procurement law at George Washington University, is troubled by the idea that the government has gone from being the best business partner to one contractors approach with caution. 'The government's not acting like a good business partner right now,' Tillipman said. 'They're squeezing contracts that have been fairly negotiated between the government and contractors.' It's always possible DOGE could end up reforming government in positive ways, but the evidence is not yet there, Tillipman said. 'What have we seen? You require everybody to come back to work and you don't have office space,' she said as one example. 'You have people doing work that they're not trained to do. You have talent drains,' Tillipman said, pointing out that most of the government firings so far were among recently hired workers often brought on with a particular expertise. 'Half the training programs for the government have been canceled, so these pipelines that the government spent decades working on to make sure that there's a steady supply and the government's an attractive place for high-quality talent have gone away.' The long-term effect of those changes will not be clear for some time. 'There's a long way to go before this is going to actually shift the way agencies work,' Malkus said. 'It just takes longer than four months.' Stevenson pointed out that despite everything DOGE claimed to do, government outlays are on track to rise by 9% in 2025 compared with 2024. That's because Americans are living longer and drawing more from programs like Medicare and Social Security. It's those programs that are driving the deficit and debt, not the discretionary spending Musk targeted. 'Chainsaws and bluster can't solve the yawning gap between revenue and spending that has led American debt to rise to unsustainable levels,' Stevenson said.
Yahoo
18-05-2025
- Business
- Yahoo
Holyoke mayor calls for reform in city's financial management
HOLYOKE — Holyoke Mayor Joshua A. Garcia says he wants to make the city's operations smoother and keep a closer eye on spending. To achieve that, Garcia last week offered two budget plans. One, at $180 million, shows the cost of running the city as it is. The other could realize savings by 2027 if the city passes what is being called the Holyoke Municipal Finance Modernization Act. 'If we're going to be honest, we know that this is exactly what this city has been needing for a very long time,' Garcia said at his State of the City address Tuesday. However, union representatives are concerned about potential job losses and the broader impact on municipal employees. Chris Adams, a leader with the United Food and Commercial Workers Local 1459, said the union is upset because two of its members will have to apply for new city jobs if the change is approved. The local represents about 4,000 members in Western Massachusetts and in parts of Vermont. Public hearings will be held Monday, May 28 and June 9. The City Council will vote on the spending plan June 17. City Council President Tessa Murphy-Romboletti said nine votes are needed to adopt the financial reform. Garcia called on the City Council to pass the reform before the end of this fiscal year, so that it can be in place by July 1. On other fronts, Garcia this week urged elected leaders to join him in thinking creatively about development and planning. Garcia has proposed projects like locally controlled broadband, forming a committee for Ingleside development, creating a sports complex and leveraging a quantum computing facility for continued economic growth. The proposed reform seeks to fix old auditing problems, make the city's financial departments work better and ensure they are more accountable, Garcia said. The reform will create new finance jobs, like a chief administration financial officer and a comptroller, merge the treasurer and tax collector roles and cut jobs in other departments. Garcia said the reform will help the city collect money better and predict its financial condition more accurately. The state has suggested creating the chief administration financial officer position for almost 20 years. In an interview, Murphy-Romboletti said having both plans to review helped her to compare finance department savings. In 2026, the Holyoke budget will balance out, and by 2027, the city could save up to $100,000 if the City Council agrees to this plan, she said. The main goal is to get the money needed in the budget to hire for the new jobs if the act is approved, she said. Garcia hired Timothy J. Plante, Springfield's former chief administrative and financial officer, to help create the new job in Holyoke, she said. Past problems in municipal finance stemmed from a lack of proper systems and checks, an issue since the 1970s, Murphy-Romboletti said. The new chief financial officer would be independent and oversee the finance department. The mayor would choose this officer, and the City Council will approve the appointment, she said. 'It feels like checks and balances,' she said. 'It is long overdue.' Murphy-Romboletti believes the shifts will save money in the long run. 'It's a huge game changer for the long-term financial health of the city,' she said. Rory Casey, the city treasurer, said the reform would not only enhance efficiencies and save money, but has the potential to generate revenue. For instance, Casey said the chief administrative and financial officer would pursue grants and reimbursement funding, enabling the city to accrue interest. Now, approximately $100,000 in interest earnings is being forfeited due to the city's inability to promptly recover owed funds, a consequence of the previously dysfunctional finance department, Casey said. About 18 full-time jobs will be cut in several departments. Thirteen of these jobs have been empty for a while, but five are filled. This includes positions in the departments of assessor, City Clerk and Office of Planning and Economic Development. Others will be cut in the building, fire, and veterans services departments, with three positions eliminated in the Police Department and several more in the Department of Public Works. The cuts are driven in part by budgetary constraints — but more importantly by a wish to improve government efficiency, Garcia said. Adams, of United Food and Commercial Workers Local 1459, said this is the first time in his eight years working with the DPW unions they have faced cuts. Adams, also a union representative for Springfield, and Chicopee, said there are no layoffs in other cities. Holyoke is the only city with layoffs, he said. The restructuring includes job changes as well as cuts. A maintenance worker at the Holyoke Police Department and another who works at different city buildings will have to take new jobs, Adams said, including one in the parks department. Those workers have been in their roles for 12 and 13 years, he said. The union plans to file a complaint against the city with the state Department of Labor for the wrongful elimination of union-protected jobs, he said. Adams said Garcia initially told him the reforms would only cut unfilled positions. Adams said he later learned that two members of the local would need to apply for new jobs without the union having any input, he said. The majority of the cuts were in the DPW. Adams questions the wisdom of that. Holyoke is the second largest city in Western Massachusetts and already operates with half the staff of cities of similar size, he said. 'Reducing positions will increase the workload for the remaining staff, making it more challenging to manage the needs of such a large city,' he said. The proposed job cuts aim to reduce expenses. Several factors are driving expenses up for Holyoke, such as rising health care costs, pension obligations and infrastructure maintenance. Garcia said the school district expects another year of increases in school aid due to the Student Opportunity Act, with aid going up by 5.87%, making the total local contribution of about $13.96 million. The Student Opportunity Act makes sure schools with more low-income students and kids learning English get more money to help them succeed. Schools must contribute a certain amount of money each year to help pay for education, based on the community's ability to fund it. Transportation costs are also rising, with a 10.32% increase, totaling $12.78 million. The city had to go out to bid for a new transportation contract, seeing a 15% increase while other communities saw 17%-25% increases since 2022, the mayor told The Republican. 'We were able to mitigate increases post-pandemic by extending the old contract for another two years, we got the lowest possible rate and locked in a rate with increases for five years in a new five-year contract. Unfortunately, transportation inflation post pandemic is consistent across the country,' he said. Garcia also highlighted Holyoke schools regaining local control and a new middle school opening in August. 'The School Committee regained decision-making power,' he said. 'Our superintendent will be accountable to only the elected School Committee and the members of the Holyoke Teachers Association will have their right to collective bargain.' However, Nick Cream, president of the Holyoke Teachers Association, said the union still does not have collective bargaining rights by law. The budget is complicated, and the teachers' union understands there are real-world constraints. However, since the Student Opportunity Act passed, which educators fought for and won, Holyoke Public Schools have received and continue to receive increases in state funding, Cream said. 'We know that Holyoke Public Schools can afford to pay its teachers, counselors, and other school-based staff the wages we deserve. There are a lot of high-paying salaries at the top of the district's hierarchy, which are a substantial drain on budget resources,' he said in an interview. One position includes the Chief of Strategy and Turnaround, who Cream says lives in Illinois and was the second-highest paid person in Holyoke Public Schools in 2024, with a yearly salary of $174,000. Garcia said he expects local Holyoke revenues to grow a bit in the coming fiscal year, but said Proposition 2½ limits tax increases. The $180 million budget keeps core services running without using reserves or free cash. Garcia said the city stopped using American Rescue Plan Act funds and is now covering expenses with its yearly budget. The city holds $1.5 million in interest earned from ARPA funds, which the treasurer is looking to invest. Despite financial challenges, Holyoke has made significant investments in government, infrastructure, including upgrades to city buildings, sidewalks, and roads, Garcia said. In remarks to the City Council, Garcia highlighted the police department's reduction in the overtime budget by 47%, achieved through the introduction of an online scheduling and employee benefits management system. In February, the city lost two federal grants totaling $20 million due to actions by the Trump administration. Despite this setback, Holyoke has earned an A+ bond rating and high marks for its financial management policies from Standard & Poor's. Although federal grants were taken away, the city's budget for the coming year is balanced, and its bond rating is good, Garcia said. Read the original article on MassLive.
Yahoo
08-05-2025
- Politics
- Yahoo
Hochul, NYC DAs take victory lap on discovery laws that led to slew of criminal dismissals
Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Generate Key Takeaways It's a brand new discovery. Gov. Kathy Hochul and New York City's five district attorneys ran a victory lap Wednesday on a revamp to the state's discovery laws included in a sprawling budget bill. The changes will prevent criminal cases from being thrown out over trivial mistakes and narrow how much evidence prosecutors must turn over to defense attorneys. Gov. Kathy Hochul, along with five district attorneys across New York City, took a victory lap Wednesday for revamping the state's discovery laws while also including a $250 billion budget bill. James Messerschmidt Hochul, speaking alongside the district attorneys at Manhattan's state courthouse, had refused to budge on the issue — which caused a weeks-long impasse on the overall mammoth budget deal. 'I said all along I would hold up a $250 billion budget on this issue,' she said. 'And here's why: behind all the legal jargon that some may not quite comprehend, there's real peoples' lives at stake here.' 'You can't have violent criminals who hurt other human beings be able to walk free because of evidence that was irrelevant might have been excluded.' The changes made will ensure that criminal cases won't be thrown out just purely over trivial mistakes, while also narrowing how much evidence prosecutors can turn over to defense attorneys. James Messerschmidt Big Apple prosecutors groused for years that 2019 reforms to the state's evidence-sharing laws — which were passed because many New Yorkers languished in jail awaiting trial on often-minor criminal charges — had led to a surge in case dismissals. The reforms' onerous requirements forced prosecutors to turn over massive amounts of evidence, they complained. Failing to turn over even inconsequential evidence led to accused criminals — including a man who allegedly beat his girlfriend and ripped off her clothes in front of his friends — walking free on technicalities, prosecutors argued. Hochul initially refused to speak on the issue, which caused a weeks-long impasse before the budget deal got passed. James Messerschmidt The deal struck by Hochul and state lawmakers would, according to the governor's office: Require courts to consider the prosecutor's efforts as a whole and whether missing evidence prejudiced the defense — an effort to prevent cases from being thrown out over insignificant mistakes; Narrow the scope of what evidence prosecutors must turn over so not to include frivolous materials that have no real weight on the case Clarify that cases should only be dismissed by judges if prosecutors did not exercise 'due diligence' Require defense attorneys to challenge a prosecutor's certification that they've completed discovery effort within 35 days 'In broad strokes what the bill does is requires us to turn over materials as quickly and as efficiently as we can,' said Staten Island District Attorney Michael McMahon. 'If the defense has objections, they have to make those objections within 35 days,' McMahon said.
