A DOGE reality check in Treasury data
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Illustration: Aïda Amer/Axios
Mega-tariffs! Mass government layoffs! Slashed federal spending! Those have been the headlines, but if you get your information from the Treasury Department's monthly accounting of its revenue and spending, things don't look nearly so dramatic — at least, for now.
Why it matters: For the first full month of the Trump presidency, the government's cash flow statements provide precious little evidence of the sweeping economic policy change that the new administration seeks to deliver.
- That may well change with time. But for now, it suggests any economic impact of these policy changes will be due to shifts in consumer and business confidence, not the direct result of customs duties collected or slashed spending.
- Moreover, it's a reminder that even seemingly big numbers — about public employees fired, contracts eliminated or tariffs raised — aren't that big relative to the entire federal budget or the massive U.S. economy.
By the numbers: The Treasury's monthly statement, released Wednesday, showed federal outlays of $603 billion in February — $36 billion higher than last February.
- The biggest drivers of the rise were higher Social Security payments (reflecting the annual cost-of-living adjustment to benefits, and demographic change) and higher interest costs (reflecting higher debt and old, low-rate debt rolling over).
On the revenue side, tariff revenue was $7.2 billion in February, up from $6.7 billion a year earlier.
- The increase reflects both Trump's 10% tariff on Chinese imports enacted early last month and Biden administration tariffs on China implemented last year.
- But that rise is a pittance in the scheme of the federal budget. Individual income tax receipts last month were $135 billion, more than 19 times as much as total customs duties.
Reality check: The big drivers of federal government spending are not individual contracts, bureaucrats' salaries or foreign aid. Rather, they are popular social welfare programs — Social Security, Medicare and Medicaid — along with defense spending and interest on the debt.
- Elon Musk has spoken of cutting federal spending by $1 trillion or even $2 trillion a year — but tellingly, House Republicans' budget outline passed last month included only $2 trillion in total spending cuts over 10 years — and many Republican lawmakers were wary of those.
- Tariffs may pack a significant punch in disrupting trade patterns, but their contribution to federal revenue — at least, at anything resembling current rates — is small.
The bottom line: The Trump administration's aggressive policy agenda will surely show up more vividly in the government's cash flows in the months to come. But for now, its biggest economic impact is in changing the vibes rather than how cash flows in and out.
