‘Doge’s Actual Impact Is Less Than $10bn’

While the Democratic Party expresses disapproval of the Trump administration’s wrecking-ball authoritarianism by wearing pink, investment banks have been seeking guidance from America’s stand-in opposition: conservative and libertarian think-tanks.

The Washington Strategy team at Jefferies invited Jessica Riedl of the Manhattan Institute and the Cato Institute’s Alex Nowrasteh and Ryan Bourne in for a chat. The subject was Doge, the Department of Government Efficiency, and whether there’s any truth to its claim to have saved $105bn through workforce reductions and contract cancellations.

TL;DR — no.

Key takeaways: 1) DOGE’s actual impact is less than $10bn; 2) DOGE cannot reduce spending passed by Congress; 3) Meaningful cuts would require reforms on entitlement programs.

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Here, via Jefferies, is Cato Institute’s Doge strategy ready-reckoner:

1. Purging progressive influence….
2. Musk-style corporate restructuring…
3. Public relations strategy for spending cuts…
4. Legal challenge to expand executive power…
5. Political cover for fiscal policy: DOGE serves as a shield for congressional Republicans, allowing them to extend the 2017 tax cuts and expand the deficit while enacting only minimal spending reductions.

And for what? A $10bn reduction would be less than 0.2 per cent of the US fiscal deficit. Summing up Doge’s approach as “spending cut performance art”, the Manhattan Institute presentation puts true savings at “closer to $2bn, or 0.03 per cent of federal budget”.

We’ve extracted the Manhattan Institute and Cato Institute PDF slide desks from Jefferies’ research.