Investing.com — The announcement of the Department of Government Effectiveness (DOGE), led by Elon Musk and Vivek Ramaswamy, has drawn public attention and speculation about its potential to transform federal operations.
However, according to analysts in Barclays (LON: ), the scope of DOGE’s influence is likely far more limited than its proponents suggest.
Contrary to its name, DOGE is not an official government department. Its function is advisory, with no legislative or executive powers to implement its recommendations.
Without congressional approval or direct legislative support, his ability is limited to making suggestions rather than implementing changes.
Potential DOGE actions include highlighting areas of federal inefficiency, such as waste, fraud and abuse, and proposing improvements to government operations.
These recommendations could be aimed at reducing the federal workforce through measures such as voluntary buyouts, early retirements, or temporary hiring freezes.
The group may also identify federal assets for sale or relocation as a means of reducing costs.
However, his actual power to effect these changes is negligible. For example, proposals to cut government spending or restructure federal agencies require bipartisan support from Congress—a tall order in the current polarized political climate.
Even identifying and dealing with “waste” is no simple task; previous efforts of similar commissions have yielded limited results due to legal, logistical and political obstacles.
Congress has “power of the purse,” meaning that significant cuts in government spending require legislative approval.
While discretionary spending, particularly in the defense and non-defense budgets, could theoretically be reduced, achieving this would require a level of bipartisan cooperation that seems unlikely.
Mandatory spending, which makes up the bulk of federal spending, is even less susceptible to DOGE influence.
Programs like Social Security and Medicare are politically sensitive and legally protected from unilateral cuts.
Similarly, efforts to deregulate or alter the workings of government are subject to rigid procedures set forth in the Administrative Procedure Act.
Regulatory withdrawals would have to go through a lengthy and often contentious rulemaking process or litigation.
Despite Ramaswamy’s claims that DOGE intends to cut the federal workforce by 75%, the feasibility of such a move remains questionable.
Most federal employees are protected by civil service laws that prevent arbitrary firings.
In addition, nearly 70% of the federal workforce works in defense or national security jobs, areas that are politically and practically challenging to cut.
Previous initiatives to greatly reduce the federal workforce have proven ineffective or counterproductive, often resulting in increased costs and reduced operational efficiency.
DOGE’s most tangible contribution may come from identifying opportunities for operational improvements.
Federal agencies spend significant amounts of money maintaining outdated IT systems, and upgrading them could generate long-term savings.
According to the Government Accountability Office, there is the potential to save billions through improved efficiency measures, although such initiatives would likely require upfront investment and congressional approval.
Ultimately, Barclays analysts stress that DOGA’s influence is more symbolic than functional.
He can use his platform to draw attention to inefficiencies and advocate for reform, but his recommendations will remain non-binding.
Achieving meaningful change will require overcoming a complex web of legal and political obstacles that far exceed DOGE’s advisory mandate.
