Last week, Elon Musk and Vivek Ramaswamy were named as leads of a Department of Government Efficiency project to “dismantle government bureaucracy.” Notably, during an October rally, Musk said he could eliminate $2 trillion from the U.S. Federal government budget.

For context, during fiscal year ending September 30, 2024, the U.S. government spent $6.75 trillion. $4.92 trillion came from revenue, the remaining $1.83 trillion added to the deficit. The following chart presents FY2024 spending relative to revenue.

During this same period, Social Security accounted for 21.6% of spending, health services 13.5%, debt interest 13.1%, defense 12.9% and Medicare 12.9%. The following chart presents the major spending categories in the U.S. budget.

U.S Budget Spending FY 2024 (in billions)

OUR TAKE

Given that mandatory spending programs (Social Security, Medicare, and unemployment insurance), along with veterans' benefits and defense spending comprise over 80% of the federal budget, achieving $2 trillion in cuts seems unlikely without fundamental changes to these core programs.
Improving government efficiency and reducing waste are worthy goals, but the proposed Department of Government Efficiency may face implementation challenges. Among them is how its mission integrates with the existing Office of Management and Budget (OMB), which already oversees government functions such as 1) budget preparation and execution, 2) agency performance evaluation, 3) federal procurement oversight, 4) financial management, and 5) information technology.
As the Trump administration seeks to leverage a majority Republican presence in the Senate and the House of Representatives, many budget/spending decisions will be made based on individual districts' dependance on government jobs and subsidies.

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