4 DOGE Proposed Cuts and the Impact On Your Wallet (and the Economy)
Written by
Kerra Bolton
Edited by
Angela Corry
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President Donald Trump appointed Elon Musk to lead the new Department of Government Efficiency (DOGE) to reduce government spending by up to $2 trillion by July 4, 2026. However, in April of 2025, Musk announced that not only would DOGE lower its projected savings estimate for fiscal year 2026 from $1 trillion to $150 billion, but that his time allocation to DOGE would drop significantly to the extent of working one to two days per week with the department.
Though many agree that the government could be run more efficiently, it remains to be seen whether or not DOGE will have a positive effect on the current economic volatility. As for Musk, though he claims he now wants to refocus on his other companies, such as Tesla, he has not stepped away from DOGE completely, so his influence on the cuts to government spending is still felt.
Here are four proposed cuts by DOGE and how they could not only impact your wallet, but the greater economy as well.
Eliminating Unauthorized Federal Spending
Typically, Congress, not the president, authorizes all federal spending, and two-thirds of all government spending is mandatory. However, Musk has said DOGE would circumvent congressional approval of proposed cuts.
The largest area of government spending DOGE could cut without congressional authorization is “discretionary spending,” which accounts for a whopping $516 billion. Musk and DOGE, with the support of Trump, specifically targeted public media, Planned Parenthood, education and the $1.5 billion earmarked for international organizations.
DOGE leaders haven’t said anything about potential cuts to Social Security, Medicare and Medicaid, which make up the majority of federal government spending. Some cuts to these programs would be eligible under the Congressional Budget Office (CBO) recommended cuts to discretionary spending.
“All of these programs are not annually appropriate by Congress,” said Wayne Winegarden, an economist at Pacific Research Institute. “Without reforms to these programs, the fiscal trajectory of the country will not be sustainably changed.”
Wallet Impact: Consumers could pay more for everyday expenses like gas and healthcare while taking home less pay.
Reduce the Federal Workforce
Musk has suggested that ending work-from-home options and mandating that all federal employees come to the office five days a week would lead to natural attrition, with workers quitting their jobs. In addition, DOGE could recommend offering early retirement and provide severance incentives to reduce the federal workforce.
“Negative consequences will never be avoided if policymakers do not focus on reforms that solve defects without sacrificing services,” said Thomas Kluz, managing director at Venture Lab, a venture capital company specializing in healthcare technology, among other areas.
Kluz explained that reducing the federal workforce could save money if they used AI-driven claims processing in healthcare, for example. Then, policymakers could redirect the savings to programs that deliver the most effective care to those who need it.
Wallet Impact: Lower spending and higher prices in communities where most federal workers live. Businesses in those areas might also have to lay off workers, adding to the unemployment rate. Slower processing times to issue Social Security checks and tax refunds.
Reduce Regulations
DOGE leaders said they would use two recent U.S. Supreme Court decisions that limited the authority of federal regulatory agencies to guide their recommendations. They are eyeing court rulings requiring agencies to get congressional approval before addressing “major questions with broad economic or social impact” and requiring courts to defer to an agency’s interpretation of “unambiguous laws.”
DOGE leaders also said they believed that the Supreme Court decisions meant that thousands of federal rules were invalid and that Trump could overrule federal regulations in the event of “government overreach.”
However, William Buzbee, a Georgetown Law professor specializing in administrative law, says that DOGE leaders’ interpretation of the Supreme Court cases was “very confused” and “neither decision limits agency powers as drastically as they claim.”
Wallet Impact: Lower costs and increased efficiency in the short term. More environmental disruptions, financial instability, and declining job quality in the long term.
Conduct Audits During Payment Suspensions
Another possible DOGE suggestion is temporarily halting payments to federal programs and agencies while performing detailed audits to check for inefficiencies, waste, or improper payments within federal agencies and programs.
Defense Department, social programs, and federal grants to state and local governments could all come under DOGE audits. For example, the Defense Department came under scrutiny in recent years for failing audits in previous years. DOGE audits could cover government procurement practices, contractor payments, and inventory management.
Wallet Impact: Consumers could experience delays in getting government payments in the short term, offset by potential savings if the audits lead to a more efficient government and less waste in the long term.
Caitlyn Moorhead contributed to the reporting for this article.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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