By Jason Lange, Andy Sullivan, and Brad Heath
WASHINGTON (Reuters) – Recent data sheds light on unprecedented government spending patterns, revealing that the U.S. government’s expenditures during President Donald Trump’s initial month in office exceeded those from the same period a year prior. This suggests that despite efforts to reduce costs, the nation’s substantial fiscal obligations remain largely unchanged. According to a Reuters analysis of federal data, Trump’s measures to cut expenses, such as freezing foreign aid and reducing federal workforce numbers, have not yet offset the increased spending on healthcare, retirement programs, and interest payments.
Between January 21 and February 20, the government spent approximately $710 billion, as per Treasury Department data, compared to roughly $630 billion during a similar timeframe last year. This rise in spending, coupled with an aging population and mounting debt, underscores the ongoing financial challenges faced by the government.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, emphasized the structural imbalances within the budget due to excessive commitments in retirement and healthcare programs. Trump’s administration aims to slash the federal budget by $1 trillion with the help of tech billionaire Elon Musk and his Department of Government Efficiency. However, reducing spending on programs like Social Security and Medicare, which make up a significant portion of federal expenditures, poses a contentious dilemma.
While Musk’s team claims to have identified billions in savings for taxpayers, concerns over privacy and security have been raised regarding their scrutiny of payment and personnel records. Despite these efforts, it is challenging for Trump to significantly reduce debt service payments without risking financial instability. Interest payments alone amounted to about $94 billion during Trump’s initial month in office, up from around $80 billion in the same period last year.
As Musk revises his savings claims and endeavors to cut costs, the delicate balance between fiscal responsibility and upholding essential programs remains a key concern.
Savings for 170 contracts amounting to approximately $3 billion were identified in an examination conducted by Reuters. Notably, savings on a single USAID contract notably decreased from almost $655 million to just 35 cents. President Trump and entrepreneur Elon Musk have undertaken significant budget-cutting measures, albeit focusing on a relatively small portion of the overall budget. Specifically, the U.S. Agency for International Development, which expended $42 billion in the 2023 fiscal year, constituting 0.6% of the budget, has been effectively dismantled. Furthermore, efforts to reduce the workforce of the U.S. civil service have been evident, with a buyout program and mass layoffs impacting approximately 100,000 of the 2.3 million federal civilian employees. Although these measures have not yet led to tangible payroll savings, it is noted that personnel costs represented 4.3% of total expenditure in the 2022 fiscal year. Additionally, a move to freeze domestic aid spending has been temporarily halted by a court ruling. (Editing by Scott Malone and Deepa Babington)
