The Trump administration may exclude government spending from GDP, obscuring the impact of DOGE cuts

[Eugene]

Source: Associated Press

The Trump administration may exclude government spending from GDP, obscuring the impact of DOGE cuts

By JOSH BOAK
Updated 12:36 PM EST, March 2, 2025

WEST PALM BEACH, Fla. (AP) — Commerce Secretary Howard Lutnick said Sunday that government spending could be separated from gross domestic product reports in response to questions about whether the spending cuts pushed by Elon Musk's Department of Government Efficiency could possibly cause an economic downturn.

“You know, that governments historically have messed with GDP,” Lutnick said on Fox News Channel's “Sunday Morning Futures.” “They count government spending as part of GDP. So I’m going to separate those two and make it transparent.”

Doing so could potentially complicate or distort a fundamental measure of the U.S. economy's health. Government spending is traditionally included in the GDP because changes in taxes, spending, deficits and regulations by the government can impact the path of overall growth. GDP reports already include extensive details on government spending, offering a level of transparency for economists.

Musk's efforts to downsize federal agencies could result in the layoffs of tens of thousands of federal workers, whose lost income could potentially reduce their spending, affecting businesses and the economy at large.

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Read more: https://apnews.com/article/trump-gdp-economy-government-spending-lutnick-7414ba1bd441bd4bf64620bfd66923b2