JPMorgan has warned that the Department of Government Efficiency (DOGE) headed by Elon Musk will face significant barriers, as Congress controls spending.

Elon Musk's DOGE is controversial as JPMorgan questions its feasibility

JPMorgan Chase published a report on November 22, evaluating the newly established Department of Government Efficiency (DOGE). Established during the presidency of elected Donald Trump and led by Elon Musk and Vivek Ramaswamy, the goal of this department is to streamline federal operations and cut wasteful spending.

"Regarding government efficiency, President-elect Trump is expected to pursue an agenda supporting the reduction of administrative procedures. Part of this includes a new Department of Government Efficiency (DOGE)," JPMorgan said, adding:

We believe that the department led by Elon Musk, with the goal of cutting government wasteful spending, will face difficulties in achieving this.

Earlier this month, Trump stated that Musk and Ramaswamy "will pave the way" for his administration to "dismantle the bureaucracy of the government, cut unnecessary regulations, reduce wasteful spending, and restructure federal agencies." He noted: "It is important that we eliminate the massive waste and fraud that exists throughout the entire annual $6.5 trillion government spending."

Musk asserts that the Department of Government Efficiency could cut federal spending by at least $2 trillion, emphasizing the urgency of addressing what he calls "crazy government spending" to prevent the United States from heading towards bankruptcy. "America is currently heading towards bankruptcy very quickly," he stressed, adding that "immediate action is needed to prevent the actual bankruptcy of the United States."

JPMorgan explains why DOGE may face obstacles as follows:

The bottom line is that Congress controls government spending, and DOGE is outside of Congress. The department can make any proposals they want, but ultimately a supermajority of 60 votes in Congress will make legislative changes.

The global investment bank concludes that: "The main concern for investors in 2025 is which parts of the Trump 2.0 agenda will be emphasized and which parts will fade."