DOGE Contract Cuts: Costs Exceeded Actual Savings

Last Updated: March 31, 2026 Reading Time: 9 min

DOGE claimed it saved the federal government over $160 billion. Independent analysts found something very different.

A POLITICO investigation published in July 2025 tracked the same contracts DOGE highlighted and found verified savings of roughly $1.4 billion against $32.7 billion claimed for the same period. That is about 4 cents recovered for every dollar claimed. The American Enterprise Institute put total actual savings at around $10 billion against $140 billion in claims.

Meanwhile, the Senate Permanent Subcommittee on Investigations calculated that DOGE's actions generated $21.7 billion in identifiable waste. The Partnership for Public Service estimated the total cost of DOGE's disruptions at $135 billion in FY2025.

If you work in the federal government or depend on its services, the gap between those two sets of numbers matters. Here is what the evidence actually shows.

Key Takeaways

• DOGE claimed $160 billion+ in total savings. Verified independent estimates put actual savings at $1.4 billion to $10 billion, roughly 4-7% of the claimed figure.
• 38% of cancelled contracts were expected to produce zero savings because the funds were already legally obligated before cancellation.
• The Senate PSI found $21.7 billion in DOGE-generated waste, with $14.8 billion going to pay employees not to work.
• Federal agencies were rehiring workers and spending more by October 2025, reversing much of what DOGE had cut.
• If your position was affected by DOGE cuts, use the Severance Pay Calculator to estimate what you are owed if separated.

Why the Claimed Numbers Are Wrong

DOGE's savings methodology was the core problem.

When DOGE cancelled a contract, it counted the "base and all options value" as the savings. That figure is the theoretical maximum a contract could ever cost if every renewal option was exercised at full value. It is not the amount actually obligated, and it is not what the government would have spent.

Bank of America Securities analysts reviewed DOGE's $24.8 billion contract savings claim in April 2025 and called it overstated. Contracting experts and oversight staff reached the same conclusion.

Two Department of Defense contracts worth $7.9 billion appeared on DOGE's "wall of receipts" as terminated savings. The New York Times found both contracts were still active. The $7.9 billion figure was fiction.

The Small Business Administration provides another example. Administrator Loeffler claimed $3 billion in SBA savings. FedScoop's review of DOGE's own data found only $22 million from 61 terminated SBA contracts.

38% of Cancellations Were Worth Nothing

Federal News Network and Fortune both reported early in 2025 that 794 of approximately 2,100 tracked contract cancellations, about 38%, were expected to produce zero savings.

The reason: funds already obligated under federal law cannot simply be reclaimed by cancelling a contract. When the government awards a contract and a vendor begins work, those funds are legally committed. Cancelling the contract under the Federal Acquisition Regulation's "termination for convenience" clause does not free the money. It triggers a settlement process in which the government still owes the contractor for work completed, reasonable profit on that work, and wind-down costs.

Settlement negotiations under FAR typically take six months to several years to resolve. Some members of the Professional Services Council went out of business from unpaid invoices during delays.

Contractors cannot recover lost profits on work not yet performed. But the government cannot simply walk away with clean books either.

The $21.7 Billion Waste Figure

On July 31, 2025, the Senate Permanent Subcommittee on Investigations released a minority staff report titled "The $21.7 Billion Blunder." The breakdown:

Category	Amount
Deferred Resignation Program (paying ~200,000 employees not to work for up to 8 months)	$14.8 billion
Involuntary separations and prolonged administrative leave for 100,000+ workers	$6.1 billion
Lost interest and fee income at Department of Energy from loan freezes	$263 million
Time costs for requiring ~1 million employees to send weekly accomplishment emails	$155 million
Total identifiable waste	$21.7 billion

This figure covers January 20 to July 18, 2025. It does not include rehiring costs, legal settlements, or service disruptions.

The Partnership for Public Service, using a broader accounting that included paid administrative leave, rehiring expenses, and lost productivity, estimated DOGE's FY2025 cost at $135 billion.

The federal deficit grew $76 billion more year-over-year through August 2025 despite all the claimed cuts.

What Happened Agency by Agency

USAID: Dismantled, Then Partially Reversed

USAID was the most dramatic case. Secretary Rubio confirmed 83% of all USAID contracts were cancelled. Overseas work halted. Staff were placed on administrative leave. Global food aid, disease monitoring programs, and humanitarian assistance operations were suspended.

Then a federal judge intervened. U.S. District Judge Theodore D. Chuang ruled that DOGE's dismantling of USAID was likely unconstitutional and issued a preliminary injunction ordering contractor and staff access to email, payment systems, and security systems to be restored. Further USAID cuts were blocked while litigation proceeded.

Analysts estimated USAID's actual de-obligated savings were closer to $6.7 billion, against a $12.4 billion claimed figure.

Department of Defense

DOGE targeted DoD civilian personnel at a 5-8% reduction, affecting an estimated 50,000 to 61,000 positions. The two largest claimed savings on DOGE's receipts page, a combined $7.9 billion across an IT contract and an aircraft maintenance contract, were found by the New York Times to still be active.

Through June 2025, HHS had $695 million actually de-obligated, more than DoD on a per-dollar basis during that period.

GSA and the Lease Problem

131 lease cancellations DOGE announced in 2025 expired without agencies actually vacating the properties. Agencies could not move because they had nowhere to go. They kept paying rent anyway. NPR and OPB reported in October 2025 that DOGE's lease cuts were generating ongoing costs rather than reducing them.

GSA headquarters staff were cut 79%. Portfolio managers were cut 65%. The institutional knowledge to manage the lease portfolio was gone, and the financial consequences followed.

The Rehiring Reversal

By October 2025, NPR reported that federal agencies were "rehiring workers and spending more" to reconstitute basic operations after DOGE's cuts. The agencies had let go workers whose functions could not be eliminated, only delayed. The cost of reconstituting that capacity came on top of the severance, deferred resignation payments, and settlement costs already spent.

The Courts Pushed Back

Several of DOGE's highest-profile actions ran into legal obstacles:

• USAID shutdown: Judge Chuang ruled likely unconstitutional. Preliminary injunction issued. Systems ordered restored.
• Treasury payment system access: A New York federal judge extended a temporary restraining order, then Judge Jeannette Vargas granted a preliminary injunction blocking DOGE employee access to Treasury financial systems.
• Museum HVAC grant: A museum sued after DOGE cancelled a $349,000 HVAC grant because a ChatGPT tool had flagged it as DEI-related. Fortune reported on the lawsuit in March 2026.
• Personal records: Multiple state attorneys general filed suits blocking DOGE access to personal records. An appeals court later lifted one related injunction in August 2025.

Legal costs from these challenges are not captured in any of the savings or waste figures above.

The Savings vs. Cost Scorecard

Source	Claimed Savings	Verified / Estimated Cost	Assessment
DOGE.gov (Jan 1, 2026)	$160 billion+	Not independently verified	Claimed
POLITICO (July 2025)	$32.7B (contracts)	~$1.4B verified	4% of claim
American Enterprise Institute	$140B+ claimed	~$10B actual	7% of claim
Senate PSI (Blumenthal)	N/A	$21.7B in waste generated	Net negative
Partnership for Public Service	N/A	$135B cost in FY2025	Net negative
Bank of America Securities	$24.8B (contracts)	Overstated, no revised figure	Inflated

Every independent analysis found the same thing: actual savings were a fraction of what DOGE claimed, and the costs of disruption were real in ways the savings figures never captured.

What This Means for Your Career

If your agency was among those hit hardest by DOGE-era cuts, you may still be sorting through the aftermath.

Separated or facing separation: Federal severance pay is based on your years of service and base pay. If you were reduced in force and are not retirement-eligible, you are likely owed severance. Use the Severance Pay Calculator to get an estimate before you sign anything.

Position reclassified or moved: Several agencies restructured positions as DOGE reduced headcounts. Check your SF-50 for changes to your Tenure Group (Block 24) or Veterans' Preference coding (Block 23). Errors in those fields directly affect your RIF retention standing if further reductions come.

Weighing whether to stay: The rehiring trend that started in October 2025 shows agencies couldn't run on what DOGE left them. But cuts are still possible in some agencies. The RIF Survival Guide 2026 explains how to read your retention standing and what bump and retreat rights you have.

Updating your career profile: Federal employees who separated faced a tighter job market than many expected. Keep your LinkedIn current. FedShot generates a professional headshot in under a minute if your profile photo is outdated.

Estimate Your Severance Pay

If your position has been affected by DOGE-related reductions, run your numbers before making any decisions.

The free Severance Pay Calculator does the math based on your salary and years of service. Federal severance for RIF separations uses a set formula: one week of base pay per year for the first 10 years, two weeks per year for years 11 and above, plus an age adjustment of 2.5% per quarter over age 40.

Run the numbers before you make any decisions.

Frequently Asked Questions

Did DOGE actually save the government money?

Verified savings were a small fraction of what DOGE claimed. A POLITICO analysis found only about $1.4 billion in verified contract savings against $32.7 billion claimed for the same period, roughly 4 cents on every claimed dollar. The American Enterprise Institute estimated actual savings across all categories at around $10 billion, compared to $140 billion claimed.

What is the $21.7 billion waste figure from the Senate?

The Senate Permanent Subcommittee on Investigations minority staff calculated that DOGE generated $21.7 billion in identifiable waste between January and July 2025. The biggest component was $14.8 billion paid to roughly 200,000 employees not to work through the Deferred Resignation Program. Another $6.1 billion came from involuntary separations and extended administrative leave for over 100,000 workers.

How did DOGE count its contract savings?

DOGE counted the "base and all options value" of a contract as savings when it was cancelled. That is the maximum a contract could theoretically ever cost, not the amount that was actually obligated or that would have been spent. Contracting experts and Bank of America analysts flagged this methodology as the main reason DOGE figures were inflated far beyond reality.

Which federal agencies were hit hardest by DOGE contract cancellations?

USAID lost 83% of all its contracts and was essentially dismantled. GSA saw headquarters staff cut 79%. HHS had $695 million de-obligated through June 2025. The Department of Defense, Veterans Affairs, and Department of Homeland Security also ranked in the top five by dollars cut.

Did courts block any DOGE contract cancellations?

Yes. A federal judge ruled DOGE's dismantling of USAID was likely unconstitutional and ordered contractor access to email, payment, and security systems restored. A separate federal judge blocked DOGE access to Treasury Department financial systems. Multiple state attorneys general filed suits, and a Delaware court blocked DOGE access to private citizen data.

What happened to DOGE itself?

Elon Musk left DOGE in May 2025 after his 130-day term as a special government employee. By November 2025, DOGE no longer operated as a centralized entity. Its functions were distributed to individual agencies. Federal agencies were already rehiring by October 2025, reportedly spending more than before the cuts just to get back to basic operations.

Related Resources

• Severance Pay Calculator: Estimate your federal severance if you were or are being separated
• RIF Survival Guide 2026: Retention standing, bump and retreat rights, and MSPB appeals
• Federal Workforce Outlook 2026: Full picture of 2025-2026 federal workforce reductions
• MDR vs RIF vs VERA/VSIP Guide: Know your rights under each type of separation action
• OPM RIF Performance Rule 2026: How the proposed rule change affects RIF rankings
• LinkedIn After Federal Layoff: Job search strategy if you are entering the private sector

Sources

• Federal News Network: Nearly 40% of contracts canceled by DOGE are expected to produce no savings
• NPR: DOGE released data about federal contract savings. It doesn't add up
• Sen. Blumenthal / PSI: The $21.7 Billion Blunder
• CBS News: DOGE says it has saved $160 billion. Those cuts have cost taxpayers $135 billion
• Politico Pro: DOGE-flation: DOGE's actual savings are a fraction of what it claims
• Fortune: DOGE's claimed contract savings of $24.8 billion are overstated (Bank of America)
• FedScoop: DOGE receipts for SBA fall billions short of administrator's cost-savings claim
• NPR / OPB: Federal agencies are rehiring workers and spending more after DOGE's push to cut
• NBC News: DOGE's USAID shutdown likely unconstitutional, judge rules
• Fortune: DOGE cancelled a $349,000 grant to replace a museum's HVAC after ChatGPT flagged it as DEI