Musk's cuts miss the mark as US spending hits record high
Elon Musk, head of the Department of Government Efficiency (DOGE), was tasked with reducing US federal spending. However, despite plans for cuts, spending rose to a record $603 (€554) billion, according to The Financial Times.
Elon Musk, appointed by Donald Trump to cut public spending, faces a challenging task. Despite cancelling contracts and staff layoffs, US federal spending increased to $603 (€554) billion in February, a record high, according to The FT. It states that this amount is $40 (€36) billion more than in the same period last year.
The Financial Times reports that savings are negligible, and the rise in spending on healthcare and social insurance negated major cuts. It adds that most federal spending is allocated to social insurance, healthcare, and defence, making significant savings challenging.
DOGE has already reduced funding for public programmes and is laying off workers en masse. Key departments, including the Department of Defence, Department of Energy, Environmental Protection Agency, and General Services Administration, which manages federal IT systems, are under scrutiny.
Massive wave of layoffs in the USA
American employers announced the largest wave of layoffs since the beginning of the pandemic in February. Over the course of the month, more than 172,000 job cuts were announced, marking a 103% increase compared to the previous year. The most significant cuts affected the government sector as a result of actions by Donald Trump's administration, Bloomberg recently reported.
It is not just the government sector facing job cuts. The crisis has also impacted retail and the technology industry—several major companies, including HP Inc. and Walt Disney Co., have announced layoff plans.
