The new Department of Government Efficiency is a mechanism announced by the president-elect of the United States, Donald Trump, to reorganize the government apparatus and reduce the budget, but its impact will depend on a series of factors beyond its control.
When President-elect Donald Trump takes office for the second time in January, two of his highest-profile supporters will be handed the keys to a new operation designed to cut government spending and improve its performance.
The Department of Government Efficiency, which, despite its name, will likely be an advisory committee rather than a proper department, will be co-chaired by Tesla and SpaceX founder Elon Musk and wealthy former Republican presidential candidate Vivek Ramaswamy.
The name of the operation, which can be shortened to the acronym DOGE, pronounced “dohj,” appears to be a product of Musk's sense of humor. Musk, the world's richest man, has long been a proponent of a fringe cryptocurrency known as Dogecoin.
Musk and Ramaswamy have set July 4, 2026 — the 250th anniversary of the signing of the Declaration of Independence — as a deadline to complete their work, which is expected to reach every corner of the sprawling U.S. government for spending that cut and bureaucracy to eliminate.
Big promises
In a statement announcing the creation of DOGE, Trump said it “will pave the way for my administration to dismantle government bureaucracy, eliminate excessive regulations, cut unnecessary spending, and restructure federal agencies.”
Musk has publicly speculated that it should be possible to identify about $2 trillion in potential cuts to the federal budget. That would represent nearly a third of the $6.1 trillion the federal government spent in fiscal year 2023 and could not be achieved without drastic reductions in government services and programs.
Ramaswamy has indicated that these cuts are precisely what he and Musk are going to suggest. In an appearance in Fox News on Sunday, he was asked if they intend to close entire government departments.
He responded: “We expect massive reductions. We expect certain agencies to be eliminated entirely. We expect massive staff reductions in overstretched areas of the federal government. “We expect massive cuts, among federal contractors and others, who are overbilling the federal government.”
He added: “I think people will be surprised at how quickly we can move forward with some of those changes.”
The first since Reagan
Organizations pushing for closer oversight of federal spending were cautiously optimistic about the creation of DOGE.
Tom Schatz, president of Citizens Against Government Waste, told the VOA that DOGE will be “the first significant and comprehensive review of the federal government's private sector” since President Ronald Reagan created the Grace Commission, a committee to recommend improvements to government efficiency, in 1982.
The ultimate impact of DOGE, Schatz said, will depend on a number of factors outside the commission's control.
“It all depends on what President Trump does with the recommendations,” Schatz said. “Recommendations must be implemented, whether through executive orders or laws… but leadership is needed, and in many cases, Congress must actually implement them.”
In a statement released after Trump announced the creation of DOGE, Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, praised the idea behind the effort, but warned that bipartisan cooperation will be needed to see real changes implemented.
“It is important that the process be as bipartisan as possible to facilitate the implementation of ideas,” MacGuineas said. “The recommendations will need congressional buy-in, further emphasizing the need for this to be a cross-party effort that leaves all options on the table to address our fiscal imbalances.”
Massive budget
The commission overseen by Musk and Ramaswamy will apply its scrutiny to a federal budget in which much of government spending is devoted to what is known as “mandatory” spending.
Mandatory spending is made up of payments that the government is required by law to make, and in 2023 that represented $3.8 trillion of the $6.1 trillion budget.
According to the Congressional Budget Office, the largest item was the $1.3 trillion paid by Social Security, the federal program that provides income to retirees. The government spent another $448 billion on income support payments for other Americans, including the unemployed and low-income parents.
Spending on Medicare, the health care program for older Americans, was $839 billion, while spending on Medicaid, which supports health care for low-income Americans, was $616 billion.
A second major category of spending is considered “discretionary.” These are payments that Congress authorizes with each budget cycle and that represented $1.7 trillion in spending in 2023.
Discretionary spending funds the daily operations of the federal government, with nearly half ($805 billion in 2023) going to the defense budget. The remaining $917 billion funds major government departments, Congress and the White House, and other government functions.
There is one last important category, federal debt interest, in a gray area between mandatory and discretionary spending. While in theory the government can choose not to pay its debt, the decision to do so could be catastrophic for the US and world economies. Debt service accounted for $659 billion in spending in 2023.
Unclear structure
It is still unclear how exactly DOGE will be structured. If established by executive order, it could be subject to the Federal Advisory Committee Act. That law requires certain steps to be taken to ensure transparency and has rules on conflicts of interest.
The latter could be problematic for Musk, whose various companies have billions of dollars in contracts with the federal government.
However, if DOGE is formed as a completely private company, whose leaders just happen to have the president's ear, those rules would not apply.