Good morning. The U.S. could be about two weeks away from ending the war with Iran or one day away from unleashing “all hell” on the country, the latter of which President Trump reinforced Sunday in a crude social post. One reason it’s hard to know is that the formerly Elon Musk-led Department of Government Efficiency gutted the 80-person team in the State Department charged with leading international energy diplomacy earlier this year.
Remember DOGE? It was supposed to last until July 4 this year but effectively disbanded in November, though even that is in dispute. Launched with a goal of cutting $2 trillion in waste, fraud, and abuse—a target later reduced to $150 billion and then $115 billion, with some insiders now saying the net cost savings may be close to negligible—there’s no question that cutting 277,000 federal jobs, or 9% of the total workforce, continues to have an impact.
Let’s look at two areas that are currently top of mind: taxes and national security. With President Trump proposing the largest budget hike since WWII, and the national debt topping $39 trillion, what impact has DOGE had there?
Taxes: The Internal Revenue Service (IRS) has lost more than a quarter of the 100,000 workers it had at the start of last year. The Global High Wealth office, which audits billionaires, lost 38% of its staff within weeks of Trump taking office. With Treasury Secretary Scott Bessent as acting commissioner, the IRS has reassigned HR and IT staff to process returns. Expect delays in receiving refunds, with further IRS cuts in Trump’s proposed 2027 budget. Despite staff cuts, federal tax revenue rose about 6% last year to roughly $5.2 trillion—a number that’s projected to grow to almost $5.5 trillion this year because of tariffs and economic growth. Corporate income tax receipts dropped almost 15% last year to $452 billion and are expected to stay flat amid tax cuts. And the IRS says AI is enabling it to better spot fraud—a good thing, as the Budget Lab at Yale estimates cuts to the agency could cost up to $2.4 trillion in net foregone revenue over 10 years.
National Security: DOGE targeted DEI initiatives, R&D, and State Department operations, largely sparing major contractors like SpaceX, which is run by Musk. While Trump’s 2027 budget calls for a 40% increase in military spending to $1.5 trillion, some worry that DOGE cuts have reduced cybersecurity readiness and America’s ability to conduct agile and accurate combat missions. But national security has long been more about soft power than brute force, as America is the largest funder of global health and humanitarian relief. Private donors have stepped up to help compensate for the gutting of the U.S. Agency for International Development (USAID), which researchers estimate has resulted in more than 600,000 deaths so far and could result in millions more by 2030. America’s role in protecting global shipping and the rules-based global order in which U.S. business thrived after WWII is under question.
The net impact of DOGE may never be fully calculated, good or bad. As one CEO told me this weekend: “It’s hard to separate DOGE from everything else that’s been done on the policy front or by other officials.”
Contact CEO Daily via Diane Brady at [email protected].
This story was originally featured on Fortune.com
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