Waste Reduction Efforts May be Impacting Card Spend in the D.C. Area

Elon Musk and the Department of Government Efficiency (DOGE) have been busy over the past two months in the Trump administration’s quest to “maximize governmental efficiency and productivity.” The department has overseen a number of cost-cutting measures, including streamlining workforces and canceling contracts and leases.

Those actions have resulted in an estimated savings of $115 billion through March 19, according to the DOGE website. Musk and his team have also placed an emphasis on identifying fraud and improper payments. 

DOGE placed a $1 spending limit on many government-issued payment cards used by General Services Administration contractors and employees, effectively eliminating their card-based purchasing power.

Perhaps not by coincidence, the General Services Administration — which provides “stewardship of the way the government uses and provides real estate, acquisition services, and technology” — tops DOGE’s “Agency Efficiency Leaderboard,” which indicates which agencies have produced the most savings as a result of DOGE initiatives.

“The US government currently has ~4.6M active credit cards/accounts, which processed ~90M unique transactions for ~40B of spend in FY24,” the Department of Government Efficiency posted on Musk’s social media platform X. “DOGE is working w/ the agencies to simplify the program and reduce admin costs.”

The department posted that information in late February. A few weeks later, the approximately 4.6 million active credit cards and accounts referenced in that post was reduced when DOGE announced it had deactivated more than 200,000 credit cards.

The Department of Government Efficiency has also been identifying government positions it deems unnecessary. Thousands of government workers have been laid off in the first quarter of 2025. 

The reductions in government workforces and the closing of federal credit cards is helping DOGE accomplish its mission of identifying and eliminating waste and fraud in the government, but it also appears to have had an effect on the economy in Washington, D.C. 

A recent Bank of America analysis that covers credit and debit card spend in the U.S. reveals that card spending weakened last month in the D.C area. Winter storms produced a significant amount of snowfall in Washington in February, which could partly explain the drop in card spending the area saw last month.

But Bank of America analysts considered winter weather in their analysis. Washington wasn’t the only East Coast city where snow accumulated last month, and the analysis compared the city’s card spending with that in other East Coast cities, including Atlanta, Boston, Charlotte, New York, Philadelphia, and nearby Baltimore.

The analysis reported that while Washington’s month-over-month card spending growth per household dropped in February, the other East Coast cities saw increases in that measurement over the same time period. Bank of America analysts wrote that recent actions impacting the federal workforce “may be weighing on spending throughout the DC area,” in comments accompanying their analysis.

Corporate cards help companies and organizations extend purchasing power to their employees without requiring them to pay for items out of pocket and proceed through a time-consuming expense reimbursement process. Companies can implement strategies to mitigate misuse or fraud in employee card practices.

Those strategies may allow companies to reach the same results as would closing cards but with less disruption. We checked in with Ali Zane, CEO and Credit Consultant with Imax Credit, to learn more about whether companies that suspect corporate card fraud should monitor employee card usage or deactivate their cards altogether.

“I always tell my clients that it’s better to keep an eye on purchases happening in real time than to turn off their cards completely,” Zane told us. “Areas with a lot of influence should keep their card rights for some important services. In this way, payments to vendors, emergency supplies, and running costs will all be safe.”

Companies that have issued a significant number of company credit cards may struggle to monitor each transaction, but they can leverage artificial intelligence (AI) to make that task more manageable.

We caught up with Ken Ringdahl, Chief Technology Officer at Emburse, to gauge his thoughts on whether AI could aid efforts to control expenditures made on employer-issued cards.

“AI can do the job — no doubt,” Ringdahl said. “But doing it right is tricky.”

A properly built and implemented AI solution may be able to track unauthorized corporate card expenses while simplifying tasks for back office staff, which can benefit organizations across numerous industries. Ringdahl told us that freezing credit cards presents  a dilemma familiar to executives at private companies.

“And both private enterprise and public sector organizations are typically looking for the expenses to map accurately to the accounting categories that ensure the books are audit-ready,” Ringdahl told us. “These are just a few of the functions that need to be seamless out of the box.”