Elon Musk has been entrusted with a monumental task: cutting $2 trillion from the federal budget. As head of a newly formed Department of Governmental Efficiency (DOGE), the billionaire entrepreneur has already moved swiftly, axing federal contracts and scrutinising government spending. However, with limited areas to trim, speculation is mounting over whether Social Security and Medicare could be affected.
Despite assurances from President Donald Trump that these programmes will remain untouched, Musk’s cost-cutting mandate raises questions about how such an ambitious target can be met. With nearly half of all federal spending allocated to health and retirement benefits, the scope for reductions is narrow, intensifying scrutiny over the administration’s next moves.
Musk’s budget-cutting mission and early actions
Trump appointed Musk to lead DOGE, an entity created via executive order to conduct a full audit of government expenditures. The decision followed Musk’s assertion at a campaign rally that he could cut “at least $2 trillion” from federal spending. Since taking office, the administration has moved rapidly to implement these cost-cutting efforts.
According to DOGE, the department eliminated $420 million in contracts within its first 80 hours, with total savings reaching $1 billion per day by late January. Musk himself acknowledged the challenge, telling political strategist Mark Penn that achieving $2 trillion in cuts might be unrealistic, but $1 trillion was within reach.
The difficulty lies in the distribution of federal spending. According to the Congressional Budget Office (CBO), approximately 24% of the budget is allocated to health programmes, including Medicare, while 21% funds Social Security. Defence spending accounts for 13%, and interest on the national debt takes up another 13%. That leaves only 21% for all other government operations, making deep reductions without touching major entitlement programmes exceptionally difficult.
Could Social Security and Medicare face reductions?
One of the key questions surrounding Musk’s appointment is whether Social Security and Medicare benefits will be affected. Trump explicitly promised during his campaign that “not a single penny” would be cut from these programmes, a stance that could limit Musk’s options.
However, according to DOGE, the agency has already terminated a Social Security Administration contract, saving around $1 million. Additionally, DOGE now has access to Medicare and Medicaid records, suggesting that these areas may be under review for further efficiencies.
Despite concerns, changes to Social Security or Medicare benefits would require congressional approval, making immediate cuts unlikely. Given the political sensitivity surrounding entitlement programmes, significant reductions could face bipartisan resistance.
