WASHINGTON (Reuters) - The first phase of the rapid-fire effort by Tesla CEO Elon Musk and President Donald Trump to cut waste from government agencies appears driven more by an ideological assault on federal agencies long hated by conservatives than a good-faith effort to save taxpayer dollars, according to two veteran Republican budget experts.

Since Trump's inauguration on January 20, Musk has dispatched members of his Department of Government Efficiency (DOGE) to scrutinize sensitive personnel and payment information in government computer systems and led a successful drive to dismantle two agencies - one that provides a lifeline to the world's needy and another that protects Americans from unscrupulous lenders.

But Douglas Holtz-Eakin, a former Republican director of the Congressional Budget Office (CBO), said the agencies Musk and Trump have targeted to date account for a tiny fraction of the overall federal budget, which is projected to reach $7 trillion this fiscal year, according to the CBO.

"They are not going to go into agencies that are doing things they like. They are going into agencies they disagree with," Holtz-Eakin, who has participated in past tax and spending negotiations in Congress, told Reuters.

Trump, a Republican, says he is "very proud" of what he describes as a vital initiative to turn off the spigot of wasteful spending. With Musk standing behind him in the Oval Office, Trump signed an executive order on Tuesday broadening DOGE's remit, telling government agencies to work with DOGE to cut staff and limit hiring.

Speaking to reporters, Musk responded to critics who say he is an unelected official who has been granted unprecedented authority by the president to dismantle parts of the U.S. government. "You can't have an autonomous federal bureaucracy. You have to have one that's responsive to the people," Musk said.

He pledged to find $1 trillion in savings through his efforts to identify fraud and waste in the government.  

An online DOGE "live tracker" claimed on Tuesday that the department has saved taxpayers $37.69 billion since it began work on January 20 but did not provide evidence of how that figure was reached.

Of the 15 agencies Musk's team have targeted so far, nine were singled out for elimination or downsizing in Project 2025, a controversial 900-page blueprint compiled by conservative think-tanks to remake the U.S. government. The document claims many federal government agencies have been taken over by a left-wing elite who use taxpayer dollars to push a liberal agenda that is "weaponized against conservative values".

Trump distanced himself from the project during the 2024 election after an uproar over some of its more far-reaching proposals, but a number of the authors are now in his administration. 

Bill Hoagland, a former Republican staffer and director of the Senate Budget Committee for more than 20 years, said the cost-cutting efforts so far have been designed to play to Trump's base, and have been "low hanging fruit for ideological reasons."

"The playbook has not been for the dollar savings, but more for the philosophical and ideological differences conservatives have with the work these agencies do," Hoagland said.

CONSERVATIVE TARGETS

There is little disagreement in Washington on the need to cut waste and fraud and make the U.S. government more efficient. The complaint by federal workers and Democratic lawmakers is the blunt force approach favored by Musk has upended the lives of thousands of public servants overnight.

Musk's team have taken over or sent DOGE workers into the National Oceanic and Atmospheric Administration (NOAA), charged with providing weather forecasting and climate data; the Department of Education, whose mandate includes prohibiting discrimination in schools and colleges; the Consumer Financial Protection Bureau, which protects consumers from exploitative lenders; the U.S. Agency for International Development (USAID), the government's main foreign aid organization; and the Federal Emergency Management Agency (FEMA), which responds to natural disasters.

Many Republicans have long seen these agencies as pushing liberal agendas that are harmful to U.S. interests. Together they constitute a fraction of federal spending. USAID disbursed about $72 billion in aid in fiscal year 2023, according to government figures, or around 1% of total federal outlays.

Conservatives have talked about closing the Education Department since Republican Ronald Reagan was president in the 1980s, in the belief that the federal government has no business being involved in schools and universities. More recently Trump and his allies have accused the department of foisting "woke" policies such as advocating for transgender players on girls' sports teams.

NOAA has been widely criticized by Republicans for what they say is an exaggeration of climate change threats, while USAID is accused of sending billions of dollars in aid each year to some countries not seen as American allies.

Republicans have also railed against the CFPB since its creation in the wake of the 2008 financial crash, declaring it an example of liberal overreach. Last week as Musk's staff entered the agency, he posted "CFPB RIP" on his X social media account and on Monday staff were sent home and the agency was shuttered.

Stephen Moore, a former economic adviser to Trump who welcomes DOGE's effort, said he opposes spending taxpayer dollars on government bureaucrats pushing liberal policy agendas.

"If you walk down the halls of USAID or the Department of Education you're not going to find any conservatives," Moore said. "It's really important they defund the left."

Musk, DOGE and the White House did not respond to requests for comment for this story.

MUSK'S TWEETS

Musk has also used his X social media platform to attack several agencies targeted by DOGE, according to a Reuters review of 1,120 of his posts between February 3 and February 10, a week in which DOGE staffers began expanding their reach.

He agreed with an X user that USAID was part of a system involved in "money laundering" taxpayer dollars "into far-left organizations", and repeated the baseless conspiracy theory that FEMA was helping people to enter the country illegally.

The Government Accountability Office, a congressional watchdog agency, estimates that the U.S. government loses between $233 billion and $521 billion each year due to fraud and improper payments.

The real test for Musk and Trump, Holtz-Eakin and Hoagland said, will be whether and when they tackle the huge drivers of government spending: Social Security, the government-run pension system; Medicare, a government-run health insurance program for seniors; and Medicaid, which provides health insurance for low income families.

Together they account for nearly half of the federal budget, and are popular with Republican and Democratic voters. Trump said on the campaign trail Social Security and Medicare are off the table.

Yet members of DOGE recently accessed payment systems at the Centers for Medicare and Medicaid Services, suggesting Medicare may not be exempt from cuts.

Hoagland agreed that any attempts to tackle the big entitlement programs will be politically treacherous.

"That is where the rubber is going to hit the road," Hoagland said. "They will have a lot more difficulty ideologically and politically going after those."