Elon Musk's DOGE Minions Are Spreading. What That Means. — Barrons.com

Al RootElon Musk is serious about his new government gig.The Washington Post reported Friday that the newly created pseudo-consultancy called the Department of Government Efficiency, or DOGE, has employees spreading throughout U.S. Federal agencies. What's more, DOGE employees have taken up some space at SpaceX's Washington offices.SpaceX is the world's most valuable aerospace company, founded by Musk in 2002. It accounted for more than half of global orbital launches in 2024.SpaceX and the House of Representatives DOGE Caucus didn't immediately respond to a request for comment.Getting a head start on work is great, but as is often the case with Musk, actions tend to generate more questions such as who is paying DOGE staff and what are all they doing exactly?"What kind of power is this entity going to have," posits Pillsbury Law partner Aimee Ghosh. That's another question. "The answer is we don't know yet."In an interview Ghosh points out that DOGE won't be an actual Federal Agency. That would require an act of Congress. It could be an official Federal Advisory Committee — similar to the Simpson-Bowles Commission that operated in the Obama era.In the official advisory scenario, DOGE could receive government funding. But there are rules including conflicts of interest. "Things that you could anticipate may not be appealing to DOGE and its leaders," adds Ghosh.The third option, she says, is DOGE is a kink of advocacy organization or think tank. "There are lots of precedents for that" and is the most likely option, according to the lawyer.None of that answers the question of what DOGE employees are doing before the inauguration.The best bet is they are starting to gather information that will form the basis for recommendations for government cuts. What's more, DOGE employees can operate now because the incoming President wants those recommendations — and any President has a lot of power. As for pay, it's possible that DOGE is privately funded at this point.Musk, via Tesla, didn't immediately respond to a request for comment.Originally, Musk and his co-head Vivek Ramaswamy floated the idea of $2 trillion in cuts from a $7 trillion-plus annual Federal Budget. Earlier this week Musk said $2 trillion was the best-case scenario: "I think we try for $2 trillion, we've got a good shot at getting $1 [trillion]."Cutting trillions means cutting into mandatory spending linked to agencies such as Medicare and Medicaid, and Social Security. DOGE won't have the power to make cuts, but it will recommend things that Congress will have to act on.There are other ways to impact spending, including annual funding for government agencies. That will still require help from Congress. Along with cuts, DOGE will try to reduce Federal regulations. The process for that can be Byzantine as well, depending partly on how statutes and regulations came into being.DOGE is slated to finish its work on July 4, 2026. Investors, for now, should expect recommendations from DOGE in the coming months, most of which will need congressional approval in the form of new laws.As for savings, investors shouldn't track each nickel saved."There is no number," says Ghosh. Savings are theoretical. Tax revenue, budgets, and spending are all moving targets. The ultimate goal is smaller Federal budgets deficits in the future. That depends on a lot more than DOGE.Write to Al Root at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.