Elon Musk's DOGE cost cuts will end up costing us

Two recent pieces of news may draw the public’s attention back to Elon Musk and his DOGE cuts, which moved to the back burner as tariffs became the big news story and Musk stepped away from active duty.

First, while initially pledging $2 trillion in savings, Musk dropped that prediction to $1 trillion, and now to $150 billion. Second, even that turned out to be overstated with assumptions that don’t hold up to scrutiny. Even if it drops further, perhaps below $100 billion, some will say that while it’s not close to what was pledged, at least it’s something. However, we must consider whether costs really are being cut by examining “hidden costs” that eliminate all supposed savings, and actually end up costing more.

Let’s start with the hundreds of thousands of federal workers now departed from agencies like the Social Security Administration, the Department of Health and Human Services, and the State, Defense and other departments. DOGE cuts also led to firings at state and local governments, contractors and nonprofits. Many of these workers have not been able to find employment, reducing the tax benefits on their income and upping the cost of unemployment insurance. The result shaves savings to below 1% of what was promised. But that’s not the end of the evaporation of cost savings.

Efforts to eliminate governmental regulations also have a cost. Eliminating background checks on guns and rescinding gun safety have a societal cost but also increase the cost of policing. Eliminating regulations requiring nursing homes to be staffed with nurses increases medical costs for vulnerable seniors. Eliminating safety checks on food drives up the cost of illness, and eliminating environmental regulations increases the cost of flood remediation.

This is counter to what cost-cutting is supposed to do. Short-term cost savings that aren’t thought out often result in larger costs. If you stop taking medicine to avoid paying for your drugs at the pharmacy, you pay a higher price for the resulting serious illness. In but one example, the budget bill passed by the House is projected to throw millions off Medicaid; their illnesses will cost all of us a lot more down the line than the supposed savings.

But nothing on the list of savings evaporates them and increases costs more than cuts to scientific research, especially health research. This was a priority for DOGE as it slashed federal research budgets at the National Institutes of Health and the National Science Foundation; the next round of cuts proposed by the White House budget office will take $16 billion from NIH and another $4 billion from the Centers for Disease Control and Prevention. With deep cuts to cancer, Alzheimer’s and infectious disease research, which will drive up medical costs considerably as a consequence of increased hospitalizations, the cost savings will become cost increases.

Worldwide scientific research increased by 19.2% from 2014 to 2018, and the return on investment in research is 20% more than the investment made. Leaving aside the societal benefits of research that led to kidney dialysis machines, the COVID-19 vaccine, and liquid biopsy screening tests for cancer, the economic returns are clear. In past generations, it was the polio and measles vaccines. Vaccines save millions of lives but also millions of dollars. Science equals progress but it also makes economic sense.

Wasteful spending never makes sense, but smart spending that saves money and lives must be a high priority.

This guest essay reflects the views of Stanley S. Litow, a professor at Columbia University and former president of the IBM Foundation.