DOGE Overhaul: Gains, Cuts Or Illusion

The Department of Government Efficiency (DOGE) is shaking up public administration in the United States. Announced in January 2025 by Executive Order 14025, this project seeks to modernise federal technology and slash costs at the same time. It brings big promises, big risks, and big questions. Finance professionals worldwide are watching closely. Will it bring real economic benefits or trigger chaos? The answer, at this point, is far from certain.

DOGE was formed to restructure and replace the old U.S. Digital Service. That service once focused on digital transformation within government agencies. Now, under DOGE, the mission is broader. Officials say they want to tackle every layer of bureaucracy, from outdated computer systems to budget lines that seem locked in stone. A key twist is DOGE’s temporary status. By design, it will expire in July 2026 unless renewed. This move avoids the usual need for congressional approval. The White House can get things started quickly, but it also faces a ticking clock of just 18 months.

Observers note that DOGE Teams, each with four specialists—an engineer, a human resources expert, a lawyer, and a team lead—must be placed in every federal agency within 30 days of the order. These teams get open access to unclassified IT systems. This is a bold step that aims to cut red tape and merge data across agencies. On paper, it should boost efficiency. In practice, critics fear security gaps or legal obstacles if members start pushing reforms too fast.

Elon Musk has emerged as a prominent figure in this plan. He pledged that DOGE will secure a two-trillion-dollar budget reduction by 2026. How? By slashing the federal workforce by up to 75% and consolidating over 400 agencies down to fewer than 100. Musk also wants major deregulation to help private firms, including his own ventures like SpaceX, move faster. This includes easier licensing for rocket launches to meet his Mars timelines. Musk’s allies claim these moves will unleash private investment. Critics warn of dire job losses, slower public services, and even legal battles.

The numbers around these cuts are huge, but so are the complications. The current federal budget stands at about $6.75 trillion, with around $305 billion a year spent on administrative costs. A 75% cut to that portion translates to roughly $229 billion, or just over 3% of total federal spending. That is real money, but it is far smaller than the $2 trillion target some supporters trumpet. Even if every proposal works out, the budget savings may not match the headlines.

Proponents also talk of big gains in productivity. Musk’s team predicts a 22% improvement through artificial intelligence and automation in federal agencies. These tools, they say, will handle routine tasks, leaving humans free for higher-level work. In theory, such changes could reduce errors, process documents faster, and save money across thousands of government offices. Yet introducing advanced systems into an often slow-moving bureaucracy has proven difficult before. Many older agencies still operate on legacy systems that lack modern data-sharing tools. Updating them in just 18 months seems wildly ambitious.

Another wrinkle involves regulation. Backers of DOGE want to scrap or loosen many rules, hoping to unlock what one forecast calls a $1.2 trillion boost in private investment. But others argue that sudden deregulation could create higher costs in the long run. Tariffs, supply chain disruptions, and other steps might drive up inflation by 15-20%. That is a serious concern for finance experts who already watch inflation trends with caution. High inflation hurts bonds, raises interest rates, and strains government borrowers.

DOGE’s short timeline raises more uncertainties. Past technology reforms in government often took two to three years to gain traction. Some took longer because of contracting rules, staff training, and the bureaucracy’s natural resistance to change. This time, DOGE has only until July 2026 before its legal mandate could expire. That is a tight window for an overhaul of federal systems. Many question whether agencies can complete major software integration projects, including the shift to better data standards, in such a short period.

Historically, the United States has launched similar efficiency drives. In 1905, President Theodore Roosevelt set up the Keep Commission to streamline processes. During the 1980s, President Reagan sponsored the Grace Commission, which tried to cut waste through private-sector methods. Under President Clinton in the 1990s, Vice President Al Gore led the “National Partnership for Reinventing Government,” which emphasised technology to reduce paperwork. Each push showed that real improvements can happen—but also that there are always snags, delays, and political battles that reduce the impact.

Still, DOGE stands out because of its direct line to the White House and its relationship with Musk, who is known for bold timelines and controversial moves. This link to the private sector is new and could either speed progress or create conflicts of interest. DOGE must navigate federal workforce rules, many of which cannot be changed by executive order alone. About 60% of these protections are locked in by law, requiring an act of Congress to loosen them. The White House can issue temporary orders, but bigger changes often stall in legislative committees.

Some worry that abrupt job cuts will disrupt services the public relies on. Others see an overlap with Musk adviser Vivek Ramaswamy’s idea to pick who stays or goes by Social Security number. Critics call that plan harsh and random. Proponents say a blunt method is needed to avoid bureaucratic foot-dragging. All of this sets the stage for potential legal challenges from unions or individuals who believe they have been unfairly targeted.

Finance professionals worldwide are also keeping an eye on how changes in American government spending might ripple out to international markets. The U.S. government is a massive customer for companies in sectors like defence, software, and consulting. If DOGE slashes budgets or merges agencies, entire business lines could shrink. On the other hand, standardised data rules might open new opportunities for global firms that specialise in data analytics or cutting-edge cybersecurity.

An international perspective may offer hints. Countries like the United Kingdom, Estonia, and Singapore have had success with digital government projects, trimming costs and improving services. The UK’s Government Digital Service saved billions of pounds by standardising processes and sharing technology across departments. Estonia and Singapore have also proven that wide adoption of digital ID systems can streamline administration. But their successes took years, not months, to implement. DOGE’s ambition of delivering huge results in well under two years sets a more dramatic pace.

DOGE supporters stress that the risk of maintaining the status quo is higher than the risk of trying something new. They point to official reports highlighting outdated systems and large sums lost each year through inefficiency. Critics reply that a rushed approach is likely to cause errors, especially if each agency is forced to open up its systems to brand-new teams without adequate oversight. They ask whether short-term budget cuts might lead to greater costs down the road.

All of this makes DOGE one of the most contentious government projects in a generation. Some see it as a genuine chance to modernise the U.S. government’s creaky systems and remove pointless red tape. Others see it as an untested gamble inspired by private-sector bravado. Both sides agree on one thing: if DOGE cannot make tangible improvements quickly, it could be scrapped or replaced. That would leave behind confusion and lost time, along with a weary federal workforce.

What’s Next

Eyes are now on the 30-day deadline for agencies to create their DOGE Teams. Investors and analysts will follow the budget proposals and watch for layoffs or departmental mergers that could rattle markets. Major contracting firms are preparing for possible shifts in federal spending, while global digital service providers look for new business openings. If DOGE meets its targets, it may reshape how governments everywhere use technology. If it fails, the resulting turmoil may spark caution for future reforms. The next 18 months will decide DOGE’s fate—and could redefine federal operations for years to come.