A new office created by former President Trump is shaking up the federal government, and it Is already drawing both attention and controversy.
The Department of Government Efficiency (DOGE), established via an executive order on Trump's first day back in office, is tasked with reducing waste and slashing regulations across the government.
With tech billionaire Elon Musk at the helm, DOGE aims to modernize federal operations, but its rapid actions are raising legal questions and political concerns.
Critics, especially Democrats, are questioning its legality, while Musk and Trump argue that the new unit will help streamline government functions.
What exactly is DOGE?
The DOGE (Department of Government Efficiency) is not a traditional government department but a newly restructured entity under the Trump administration. Initially, DOGE was intended to be led by both tech billionaire Elon Musk and Vivek Ramaswamy, a financier who initially ran for the Republican presidential nomination before stepping out to focus on running for governor of Ohio.
Though the name "Department" suggests a large, formal government body, DOGE operates more like an advisory group, with close ties to the White House and a mission to streamline government operations and reduce waste.
Trump's executive order on his first day back in office didn't create a new Cabinet-level department but rather renamed and restructured the existing United States Digital Service (USDS), which was launched under former President Barack Obama in 2014 to improve the federal government's digital capabilities. The USDS was formed after the problematic rollout of the HealthCare.gov website and focused on improving government technology.
Trump's order moved this unit from the Office of Management and Budget to the Executive Office of the President, placing DOGE under direct oversight from the White House. The new mandate directs DOGE to modernize the federal government's technology, software, and digital infrastructure.
Elon Musk now leads DOGE, bringing in a team of engineers, many from Silicon Valley, to work on modernizing government processes. In November, Musk and Ramaswamy both emphasized that they would serve as "outside volunteers" and not federal officials or employees, working to assist the White House on issues such as spending cuts and regulatory reform.
In February, Musk's role shifted to that of an unpaid "special government employee," a position that limits his time in the role to 130 days a year.
DOGE's somewhat ambiguous structure and mandate make it an unconventional force within the federal government, with some seeing its outsider status as a key advantage in making quick, impactful changes.
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What is DOGE working on?
DOGE is focused on making significant changes to various federal departments, aiming to reduce inefficiencies and redirect funds to more effective government operations. One of its key targets is the U.S. Agency for International Development (USAID), with Musk and Trump pushing to shut it down and move its functions under the State Department.
The proposal to dismantle the six-decade-old organization has drawn mixed reactions, with some Republicans supporting it, while Democrats argue that Congress must approve such a move.
DOGE is also working on drastic cuts to other federal agencies, such as the Department of Education. Some sources suggest that the Department of Education may face downsizing or even elimination.
The National Oceanic and Atmospheric Administration (NOAA) could also experience significant budget and staffing reductions, which experts warn could affect critical weather forecasting.
In terms of budget cuts, DOGE claims to save around $1 billion a day, primarily by eliminating contracts related to Diversity, Equity, and Inclusion (DEI) initiatives across several agencies.
This includes canceling contracts worth millions of dollars in the Government Services Administration and the Department of Education. Additionally, DOGE has proposed canceling 85 DEI contracts across more than 10 federal agencies, saving up to $1 billion.
In its broader push to reduce government spending, DOGE has also implemented a federal worker hiring freeze and mandated that federal employees return to the office. While these measures could lead to savings, they may also reduce the agencies' capacity to perform essential functions, such as processing tax refunds and managing Social Security and Medicare benefits.
Furthermore, DOGE has gained unprecedented access to the Treasury Department's payment system, which manages more than $6 trillion in annual federal cash flow.
Although DOGE officials only have "read-only" access to the system, concerns have been raised about Musk's role as a special government employee, with critics questioning his access to sensitive data due to potential conflicts of interest.
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What Experts Are Saying About DOGE's Actions?
The actions and proposals from DOGE have sparked a variety of reactions from financial experts and critics. Many have expressed concerns about the long-term impact of the changes being implemented, especially considering the potential for these cuts to be reversed by future administrations.
Kevin Thompson, a finance expert and CEO of 9i Capital Group, noted that while some cuts might become permanent, much of what the Trump administration is currently implementing could be undone by the next president. He explained that these changes would need to be codified into law, which requires approval from both the House and Senate.
Without this formalization, Thompson believes the initiatives lack staying power, although he pointed out that many Republicans are likely to support Trump's actions due to political pressure within the party.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, echoed Thompson's sentiments, emphasizing that while DOGE's staffing cuts, including hiring freezes and contract buyouts, may lead to short-term savings, they may not be sustainable in the long run.
He argued that the federal government is a massive entity to manage, and operating with limited staffing could present challenges that the new administration may not fully anticipate.
Michael Ryan, a finance expert and founder of MichaelRyanMoney.com, raised concerns over the methodology and transparency behind DOGE's cost-cutting measures. He warned that while trimming the budget might seem beneficial, it comes with risks to governmental stability. Ryan highlighted that the dismantling of crucial departments like USAID could undermine national security and strain international relations, particularly in terms of diplomacy and foreign aid.
Overall, while many financial experts acknowledge the potential for short-term savings, the broader implications of DOGE's approach to federal spending remain uncertain and controversial.
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Efforts to Cut Government Contracts
DOGE has used posts on Musk's Twitter/X platform to highlight its efforts to cut government spending, focusing on what it sees as wasteful contracts. On February 4th, DOGE announced it had canceled 36 contracts, saving about $165 million across six agencies. This was followed by the termination of 12 consulting contracts and 12 "underutilized leases."
One key cut included a $23 million work order for "Digital Modernization Program Management Office support." These actions reflect DOGE's goal to reduce inefficiencies in the federal government, a central part of Musk's plan to reshape public sector spending. While some support these cuts, others have raised concerns about their long-term effects on federal services.
Final Say
Lastly, the creation of DOGE has undeniably sparked excitement and controversy within the federal government. With Elon Musk at the helm, the department's aggressive approach to cutting waste and restructuring government operations is shaking up established norms.
While proponents argue that these changes are necessary to improve efficiency and reduce government spending, critics remain concerned about the potential long-term risks, including the destabilization of vital agencies and the uncertainty of these reforms' staying power.
As DOGE pushes forward with its bold agenda future will reveal whether these efforts succeed in modernizing the government or lead to unintended consequences.
