Donald Trump has pledged to cut unnecessary federal expenditures by appointing two billionaires — Tesla’s CEO Elon Musk and entrepreneur Vivek Ramaswamy — to lead this effort, which he has named the Department of Government Efficiency, abbreviated as DOGE.
The recent appointments made by President-elect Donald Trump have sparked numerous questions regarding the initiative, particularly about whether Musk and Ramaswamy will possess the authority to implement changes to federal expenditures, given that Congress is responsible for authorizing government spending. Additionally, there are uncertainties about the specific areas where these entrepreneurs might seek to reduce costs. Notably, DOGE is not an official government department, which raises concerns about its authority and operational framework.
What is the aim of the Department of Government Efficiency?
In a recent statement, Trump announced that the purpose of DOGE is to eliminate excessive regulations, cut wasteful expenditures, and reorganize federal employees and agencies. The name DOGE serves as a reference to Musk’s endorsement of the cryptocurrency dogecoin, which was originally created as a joke by two software developers and features the image of a grinning Shiba Inu. (Recently, dogecoin has seen its value increase over threefold, currently trading at 39 cents.)
The President-elect indicated that the efforts of Musk and Ramaswamy will conclude no later than July 4, 2026, coinciding with the 250th anniversary of the Declaration of Independence. He provided only a general outline of the initiative without detailing how it will be staffed or financed.
The Trump campaign has not shared further information regarding the funding for DOGE or whether Elon Musk and Vivek Ramaswamy will receive compensation for their involvement.
Given that DOGE is not an official government entity, which would require congressional authorization to establish, it seems unlikely that funding will be secured.
Congress is responsible for federal spending, and lawmakers may be reluctant to endorse cuts to major programs like Social Security or Medicare, which enjoy widespread support among voters, or to military funding.
There is also ambiguity surrounding how this organization will operate. It may fall under the Federal Advisory Committee Act, which outlines how external advisory groups operate and their accountability to the public.
Trump characterized Musk and Ramaswamy’s roles as providing advice and guidance from outside of government, but this perspective was challenged by Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution, who formerly managed the National Performance Review during the Clinton Administration.
What authority will Musk and Ramaswamy possess?
Kamarck pointed out that they “have no authority — none whatsoever,” while emphasizing that presidential backing could sway lawmakers to support initiatives aimed at improving efficiency.
Musk, currently the wealthiest individual with an estimated net worth of $319 billion according to the Bloomberg Billionaires Index, has characterized the U.S. government as oversized and its expenditures as unsustainable. He has expressed a desire to decrease the number of federal agencies to 99 from the current total of over 400, noting that there are numerous agencies that people have never heard of, and they often have overlapping responsibilities.
While campaigning alongside Trump, Musk claimed he could trim “at least $2 trillion” from the annual budget, asserting, “Your money is being wasted, and the Department of Government Efficiency will fix that.”
Known for implementing cost reductions at his own companies, Musk significantly cut the workforce of X after acquiring it two years ago and has focused on reducing manufacturing costs at Tesla.
However, these strategies have yielded mixed outcomes, as X’s valuation has dropped by about 80 percent since his takeover, while Tesla’s stock has increased by 48 percent over the past year, elevating its total value to over $1 trillion.
Ramaswamy, with a reported net worth of around $1 billion according to Forbes, exited the presidential race in January after running an “anti-woke” campaign. He has also supported government reductions by proposing the elimination of the Department of Education, a goal that aligns with Trump’s vision.
Can the new ‘Department’ achieve its objectives?
Despite its title, this initiative won’t truly function as a “department” akin to the Department of Education or the Department of Homeland Security. Establishing a government agency would necessitate congressional approval, and the initiative will not be housed within the government, analysts say.
In his statement, Trump mentioned that DOGE will provide advice and guidance from outside of Government, and will collaborate with the White House and the Office of Management & Budget to implement large-scale structural reforms. However, the commission’s placement outside the formal government structure raises significant doubts about its capability to achieve its aims.
Max Stier, president and CEO of the Partnership for Public Service, a nonprofit focused on enhancing governmental efficiency, commented that the real authority lies with the Cabinet secretaries and agency heads appointed by Trump. He expressed skepticism about the ability of Musk and Ramaswamy to effect meaningful change from the outside.
Stier remarked that he has yet to witness a concrete plan from the Trump transition team that would genuinely enhance government functionality. He described DOGE as another example where it does not yet seem to be a serious initiative, acknowledging that while the goal of improving government efficiency is commendable, there are numerous reasons why this approach may not be effective.
Musk and Ramaswamy’s perspectives on government reform
Both Musk and Ramaswamy have shared some ideas for government reform; Musk has committed to cutting $2 trillion from the federal budget, albeit with few specifics on potential cuts.
The total discretionary spending in the federal budget is approximately $1.7 trillion, and Trump has promised not to reduce funding for Social Security and Medicare, which are two of the largest government expenditures.
In late October, Musk suggested on X that his proposed cuts could lead to economic difficulties for many individuals. One area Musk identified for potential cuts was medical research spending.
Meanwhile, Ramaswamy stated on the social media platform that the government should refrain from funding programs that have expired, noting that there are over 1,200 programs that are no longer authorized but still receive appropriations. He argued that this is completely absurd and asserted that, “We can & should save hundreds of billions each year by defunding government programs that Congress authorizes no longer. We’ll challenge any politician who disagrees to defend the other side.”
Joe Spielberger, policy counsel at the Project on Government Oversight, a nonpartisan government watchdog, remarked that it’s unclear at this point what the exact role or mandate of this advisory committee will be.
Have previous administrations made similar attempts?
Yes, both Republican and Democratic administrations have previously undertaken initiatives aimed at reducing government spending.
In 1982, President Ronald Reagan established the Grace Commission, led by prominent businessman J. Peter Grace, CEO of W. R. Grace & Company, a chemical firm.
According to the Associated Press (AP), approximately 150 business professionals volunteered for this commission, which ultimately proposed 2,500 reforms, as documented by the Ronald Reagan Presidential Library.
In the 1990s, President Bill Clinton initiated the National Performance Review, with the goal of creating a more efficient and cost-effective government, as noted by Kamarck.
This group comprised civil servants who were well-acquainted with the bureaucracy and often frustrated by it. The initiative succeeded in streamlining operations and reducing costs, resulting in the elimination of over 300,000 jobs, according to a Congressional Research Service study.
Kamarck noted that the group prioritized technology integration across departments as the internet was emerging, resulting in efficiencies like online tax filing.
Where could the Trump administration identify savings?
Although experts are doubtful about Musk’s assertion that he can slash government spending by $2 trillion, they acknowledge that there are areas where efficiencies could be explored.
In 2023, the federal government allocated $658 billion for net interest on the national debt, a 38 percent increase from $476 billion in 2022. This amount, the highest ever spent on interest, accounted for 2.4 percent of GDP.
One potential source of savings is the elimination of Medicare fraud, as pointed out by the Citizens Against Government Waste, a nonpartisan organization that examines government spending. Their recommendations also include reducing the nation’s contributions to the U.N. and discontinuing subsidies for certain agricultural products, such as dairy and sugar. They estimate that these measures could yield $377 billion in savings in the first year, which represents about 19 percent of the $2 trillion that Musk aims to cut. However, Kamarck emphasizes that efficiency encompasses more than just cutting costs; it also involves understanding the workings of the bureaucracy.
