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By Suzanne Blake
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The Department of Government Efficiency (DOGE), which was created by President Donald Trump, is recommending significant cuts to the federal government, changing everything from student loans to humanitarian relief.
Why It Matters
Trump and DOGE head Elon Musk are looking to make widespread cuts to federal agencies in the first month of Trump's presidency in what they say is an effort to save taxpayers money and end bureaucracy.
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However, critics are sounding the alarm that necessary government services could be in jeopardy as the cuts begin to go through.
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What Is DOGE?
DOGE, which stands for Department of Government Efficiency, is a new department formed by Trump to help save money at the federal level.
The cuts that the department is recommending could potentially end the red-tape bureaucracy that comes with having several federal departments working in conjunction. However, it also could put essential services such as student loan services and the IRS tax refund timelines at risk, critics say.
As it is not a formal government department, DOGE has no legal or executive power to enforce its recommendations.
Who Is On The DOGE Team?
DOGE is headed by Tesla executive Elon Musk, and much of the team includes young college students.
When advertising the positions available at DOGE, Musk said applicants should expect 80-plus-hour work weeks and no salaries.
"This will be tedious work, make lots of enemies & compensation is zero," Musk wrote on X, formerly Twitter, which he owns.
What Has DOGE Targeted So Far?
DOGE has focused on several departments, particularly those deemed redundant, like the Department of Education and the U.S. Agency for International Development (USAID).
By making substantial cuts to these departments or getting rid of them altogether, Trump and Musk said they hope to get rid of inefficiencies and redirect the funds back to the federal government for more effective use.
DOGE has recommended USAID be dismantled and its services move under the State Department.
Meanwhile, the National Oceanic and Atmospheric Administration could also see significant budget and staffing reductions, which could threaten critical weather forecasting, experts say.
The Department of Education will likely face a dramatic downsizing or even outright elimination.
DOGE has so far claimed to average about $1 billion a day in savings based on budget cuts, and many of the most talked-about cuts were made to jobs and contracts centered around DEI initiatives in several federal agencies.
This includes recommending canceling 12 contracts in the Government Services Administration and the Department of Education, saving roughly $30 million. DOGE also recommended ending 12 underutilized leases, saving about $3 million.
On Monday, the Musk-led department said it wanted to axe 36 contracts, which would save $165 million across six agencies.
Last month, DOGE announced it wants to cancel 85 DEI contracts at more than 10 federal agencies, amounting to about $1 billion. A $45 million scholarship program for students in Burma would also be axed.
Likely also a part of DOGE's attempt to reduce government spending, Trump mandated that all federal workers must return to the office and implemented a federal worker hiring freeze this month.
This could save money in terms of salaries, but it also could reduce capacity for the agencies to do their jobs, leading to delays in tax refunds or even problems with Social Security and Medicare and Medicaid benefit processes, experts say.
What People Are Saying
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek: "Some cuts may become permanent, but realistically, much of what Trump is implementing can be reversed by the next administration. Unless these changes are codified into law—which requires approval from both the House and Senate—they lack long-term staying power. That said, many Republicans may support Trump's initiatives, as history has shown that opposing the party line can come with political consequences."
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "DOGE has also been instrumental in some of the changes to staffing, which have included hiring freezes and contract buyouts of employees the new administration no longer wants in their roles. However, those staffing savings may not be permanent. The federal government is a massive organization to run and could be more difficult to operate with limited staffing than the new administration expects."
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: "DOGE is an unprecedented and highly controversial approach to federal spending reform. From a financial planning perspective, there are critical concerns about its methodology and long-term implications...
"These cuts pose significant risks to long-term governmental and economic stability. While cost-cutting measures can be beneficial, the current approach lacks any transparent methodology or comprehensive impact analysis. In my opinion, the potential destabilization of critical agencies like USAID could compromise national security and international diplomatic relationships."
What Happens Next
In the short term, DOGE's cuts could create disruption and confusion, Thompson said.
"Long-term impacts may be more muted, as many of these changes are executed via executive action and can be undone with a simple reversal," he said. "The bigger question is the global impact—how much credibility does the U.S. lose with its allies when a private citizen, like Elon Musk, seemingly wields more influence than the president?"
Under Trump's order, DOGE is set to be a temporary organization until July 4, 2026.
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