To help you understand what's going on in politics and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
There’s still lots of uncertainty about DOGE — the Department of Government Efficiency. The new office in the Trump White House has tried to “move fast and break things” to improve the federal government, in many cases using legally questionable methods. But a concerted agenda is slowly emerging.
So far, DOGE has dismantled federal agencies, most notably USAID — United States Agency for International Development — now in a state of limbo. It’s also laid off thousands of federal workers as a prelude to an even larger reduction-in-force effort that is now under way at various federal agencies.
Legal setbacks
Both efforts have encountered legal setbacks, including a ruling by the conservative Supreme Court requiring the Trump administration to disburse money for already completed foreign aid work. Another judge ordered DOGE to halt further actions against USAID, though the agency can’t resume its work. A lower court says the White House must reinstate 30,000 workers who were fired because of their probationary status.
An expansion of executive power is at stake. The Trump administration seems intent on testing its legal limits, hoping for favorable court rulings that will increase its ability to fire federal workers, impound congressionally appropriated funds and more.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Reduction-in-force initiative
In the meantime, expect DOGE to try doing more things by the book. This includes implementing an even bigger reduction-in-force initiative across several agencies. The Department of Education is in the process of cutting 50% of its staff (roughly 1,900 people) via both layoffs and voluntary retirement. The Department of Veterans Affairs aims to return to its 2019 employment levels (400,000 employees) by shedding around 80,000 jobs. The Department of Defense wants to lose at least 55,000 of its roughly 780,000-strong civilian workforce. The Social Security Administration will look to cut 7,000 of its 57,000 employees.
But note that the traditional RIF process can take months to complete and comes with numerous requirements that open the door to more legal challenges.
DOGE also wants to fast-track efforts to shrink Uncle Sam’s office footprint, terminating hundreds of leases, some of which will expire as soon as this summer. Even here, projected savings may prove short-lived. Some leases will be renegotiated at the urging of agencies that were generally not consulted about the changes.
Slow progress and confusion
The slow pace of progress has proved frustrating for President Trump, whose hunger for quick victories has been stymied by political and legal realities, including fears that the reduction in manpower will hamper government services. So far, DOGE’s actions have mostly sown confusion in Washington. That in itself could help if it discourages people from seeking federal jobs.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Read more
- Social Security Is DOGE's New Target: What You Need to Know
- With DOGE Making Cuts at National Parks, Can You Still Use Your Senior Pass?
- DOGE Gains More Grip on IRS Amid Leadership Reshuffle
- Donald Trump Tests His Limits
-
Dow Hits New Intraday High on Fed Day: Stock Market TodayNot even the most important stock in the world could keep the oldest equity index down on a significant day for markets.
-
Savings Goal CalculatorTools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
September Fed Meeting: Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
Ask the Editor, September 12: Tax Questions on 529 Plan Rollovers to a Roth IRAAsk the Editor In this week's Ask the Editor Q&A, we answer four questions from readers on transferring 529 plan money to a Roth IRA.
-
Hot August CPI Report Doesn't Shift the Rate-Cut Needle: What the Experts SayThe August CPI came in higher than forecast on a monthly basis, but Wall Street still expects a rate cut at next week's Fed meeting.
-
How AI Puts Company Data at RiskThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
Trump's Economic InterventionThe Kiplinger Letter What to Make of Washington's Increasingly Hands-On Approach to Big Business
-
Where is the Foreign Dividend Boom Headed?It's been a golden six months for foreign dividend stocks, but can any be relied on for predictable income going forward? Here are some options.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
