Can DOGE cut $2 trillion in federal spending? Not directly, but it has Trump’s ear.

Soon after winning the U.S. presidential election, Donald Trump announced the creation of the Department of Government Efficiency. Spearheaded by businessmen Elon Musk and Vivek Ramaswamy, DOGE will have the job of spurring a downsizing of government by recommending where to cut waste, slash regulations, and trim the federal workforce.

Some Republicans say this is long overdue, while some Democrats and civil servants worry it would gut the institutional expertise crucial for effective government services. The word “department” is a misnomer – the DOGE will be an advisory body, lacking direct power. The plan is for it to work with the Office of Management and Budget, and to make recommendations to the president and possibly to Congress. But its two co-chairs appear to have ambitious plans: Mr. Ramaswamy said that if the department had a mascot, it would be a chain saw.

How much has the government grown in recent decades?

The number of people employed by the federal government hasn’t changed much since World War II, although federal contract- and grant-funded employment has grown. Congress has also created a swath of new agencies since then, and the Federal Code of Regulations has swelled from just under 10,000 pages in 1950 to 185,984 in 2019.

The national debt has nearly doubled since 2015 and now sits at $35 trillion, or 122% of the United States’ gross domestic product. Debt grew by about $7.8 trillion in Mr. Trump’s first term, and it is projected to have grown by a slightly higher number by the time President Joe Biden finishes his term. Experts caution, however, that these numbers can reflect preexisting laws and circumstances outside a president’s control.

Many federal workers have not returned to their offices since the pandemic, and as of summer 2023, the government still was paying for 17 agency headquarters that were at 25% capacity or less, according to a Government Accountability Office report. Mr. Musk and Mr. Ramaswamy argue that unelected bureaucrats, and the government’s size, make federal spending unaccountable to voters – a situation they called “antithetical to the Founders’ vision” in a Wall Street Journal op-ed.

What does DOGE hope to do?

Mr. Musk has suggested that $2 trillion could be cut from the nearly $7 trillion federal annual budget. He and his co-chair would have less than two years to complete their work: The department has a cutoff date of July 4, 2026, so as not to become another example of bloated government. The DOGE’s proposed cut is ambitious enough that even many of Mr. Musk’s supporters question if that’s within reach.

The plans to attack government spending are broad. DOGE’s X account has highlighted spending on items it views as irresponsible, such as holograms of dead comedians and the construction of an IHOP in Washington. The co-chairs have also suggested ideas for slimming the number of federal workers, with Mr. Ramaswamy saying that he expects certain agencies to be “deleted outright.” Other stated targets range from Medicare payments to Planned Parenthood funding.

Politicians have their own suggestions for cuts. Republican Sen. Joni Ernst sent the co-chairs a detailed “menu” ahead of Thanksgiving that included cuts to government leasing for vacant office buildings and money spent creating money (she found it costs the government three cents to make a single penny). Democrats California Rep. Ro Khanna and Vermont Sen. Bernie Sanders expressed hope that the DOGE could help thin defense spending.

What do Musk and Ramaswamy bring to this initiative?

Mr. Musk’s businesses have a mixed track record of efficiency. His social media platform X has seen a 75% decrease in value since he laid off 6,000 workers, or roughly 80% of the staff, two years ago. His electric vehicle company Tesla’s profits have been up and down recently. Mr. Musk has gone toe-to-toe with the Federal Aviation Administration over regulations on rocket launches at his company SpaceX, which has received nearly $20 billion in federal government contracts since 2008.

Mr. Ramaswamy founded a pharmaceutical company that earned him a fortune. He advocates for libertarian values, and he pledged during the 2023 campaign to cut over 75% of the federal workforce.

“We are entrepreneurs, not politicians,” the two men wrote in their op-ed. But working with the federal government will present challenges. Given that the DOGE’s role is advisory, the co-leaders won’t be able to make the kinds of direct changes they did as CEOs. If they want to work with Congress, they’ll have to win over members who may balk at spending cuts in their districts.

Still, supporters say these two executives shouldn’t be underestimated. Mr. Musk appears to have the ear of Mr. Trump, which will be crucial in converting the advisory body’s recommendations into practical change. The president-elect has invited Mr. Musk to attend high-level meetings, and he praised him during his 2024 victory speech.

How feasible are Musk and Ramaswamy’s plans?

Mr. Musk and Mr. Ramaswamy say they will present Mr. Trump with a list of regulations for the chopping block. Mr. Trump could then use executive action to order an agency to start the process to overturn that regulation. That can take over a year, involving a required analysis of the proposed change’s impact and public comment. If the change is approved, people who benefited from the regulation are likely to sue. The two co-chairs will need to “do their homework” to avoid protracted legal battles, says Susan Dudley, founder of the George Washington Regulatory Studies Center.

The co-chairs say that they are relying heavily on two recent Supreme Court decisions that limit agencies’ ability to create and interpret regulations, which are based on statutes passed by Congress. The DOGE co-chairs hope courts will rule that regulations they target don’t have a basis in law.

The two men could try to work with Congress, which can pass laws to overturn regulations, or to change or slow down the way regulations are created. But Republicans have a slim majority in Congress, so Mr. Musk and Mr. Ramaswamy might have to develop a strategy to garner bipartisan support.

That isn’t an exhaustive list of options. For example, Mr. Musk and Mr. Ramaswamy could recommend that Mr. Trump implement a mandatory in-person, five-day workweek that could push federal employees, many of whom are still working from home, to resign. They could also move various agency headquarters out of the Capitol. Both are ideas that the co-chairs have recently proposed.