Feb 28, 2025
When President Donald Trump announced plans to establish the Department of Government Efficiency (DOGE) with Elon Musk at the helm, public reaction was mixed.
Some initially worried that Musk and team would overstep and cut critical programs people rely on. Others may have celebrated the introduction of DOGE and its directive to cut needless spending and avoid wasting taxpayers’ dollars.
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Since Trump’s inauguration many federal employees have been laid off, and DOGE has moved to curb government spending in a flurry of actions, including the attempted freezing of trillions of dollars in federal grants and loans. A federal judge has temporarily blocked the freeze.
The IRS has announced plans to lay off thousands of probationary workers smack in the middle of tax season, and the Consumer Financial Protection Bureau (CFPB) — a watchdog agency created after the 2008 financial crisis — has been forced to effectively shutter.
And these are just some examples.
The events of the past few weeks have left many Americans alarmed. But entrepreneur and Shark Tank personality Kevin O’Leary thinks DOGE could actually be doing more.
"The issue is, they're not whacking enough," he said.
Is he right?
There’s a lot of fat to trim
While many Americans and political leaders alike are worried about the impact of DOGE's actions, O'Leary thinks there's more work to be done, and that it should be done more quickly.
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During a recent appearance on CNN, O'Leary compared what's happening with the federal government to a private equity takeover.
He explained that when distressed companies are taken over, the cuts often exceed initial projections, and that that's a good thing, because it tends to make the organization work more efficiently.
"All of these agencies are like big fat chickens dripping over barbecues of fat," O'Leary. "If they can't show you that they're adding value, you whack."
The problem, though, is that a lot of the federal employees being let go, and a lot of the programs being cut, serve the purpose of helping Americans in one way or another. It’s true that there may be fat to trim. But O’Leary’s suggestion to “keep slashing” has the potential to hurt the public.
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How federal cuts could hurt Americans’ finances
The fact that the IRS is slashing jobs during tax season means filers may have a harder time contacting the agency for support. Even without cuts, the IRS is notorious for long wait times.
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There could also be fewer employees available to conduct audits. And while it can be argued that that's a good thing, it's most likely to benefit wealthy taxpayers who tend to skirt the rules and underreport income.
Taking away the CFPB's power could also hurt consumers' finances. One thing the CFPB did was launch an initiative to save consumers billions of dollars per year by reducing junk fees charged by banks and credit card issuers. If the CFPB is derailed, consumers won't have an agency to advocate on their behalf.
Cuts to USDA programs could also limit domestic agricultural output. That could result in shortages of commonly consumed goods. Cutting USDA funding could also leave farmers on the hook for higher costs, which they may pass on to consumers, driving food prices upward.
Cuts at the Department of Housing and Urban Development (HUD), meanwhile, could exacerbate the affordable housing crisis that's already plaguing the nation. HUD also supports homeownership among lower and moderate-income families through the Federal Housing Administration, which insures mortgages. If funding and staff are cut, FHA loans could be harder to come by.
Finally, while DOGE isn't cutting Social Security benefits, numerous Social Security offices are shutting their doors in the wake of DOGE cuts. This could, in turn, make it harder for seniors to get their Social Security questions addressed and even file for benefits, which those who aren't tech-savvy may opt to do in person.
O’Leary is right in that wasteful spending needs to be reduced at the federal level. But any fiscal gain needs to be weighed against the potential for negative impact on Americans’ lives.
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Maurie Backman has been writing professionally for well over a decade. Since becoming a full-time writer, she's produced thousands of articles on topics ranging from Social Security to investing to real estate.
