Good morning. The U.S. could be about two weeks away from ending the war with Iran or one day away from unleashing “all hell” on the country, the latter of which President Trump reinforced Sunday in a crude social post. One reason it’s hard to know is that the formerly Elon Musk-led Department of Government Efficiency gutted the 80-person team in the State Department charged with leading international energy diplomacy earlier this year.
Remember DOGE? It was supposed to last until July 4 this year but effectively disbanded in November, though even that is in dispute. Launched with a goal of cutting $2 trillion in waste, fraud, and abuse—a target later reduced to $150 billion and then $115 billion, with some insiders now saying the net cost savings may be close to negligible—there’s no question that cutting 277,000 federal jobs, or 9% of the total workforce, continues to have an impact.
Let’s look at two areas that are currently top of mind: taxes and national security. With President Trump proposing the largest budget hike since WWII, and the national debt topping $39 trillion, what impact has DOGE had there?
Taxes: The Internal Revenue Service (IRS) has lost more than a quarter of the 100,000 workers it had at the start of last year. The Global High Wealth office, which audits billionaires, lost 38% of its staff within weeks of Trump taking office. With Treasury Secretary Scott Bessent as acting commissioner, the IRS has reassigned HR and IT staff to process returns. Expect delays in receiving refunds, with further IRS cuts in Trump’s proposed 2027 budget. Despite staff cuts, federal tax revenue rose about 6% last year to roughly $5.2 trillion—a number that’s projected to grow to almost $5.5 trillion this year because of tariffs and economic growth. Corporate income tax receipts dropped almost 15% last year to $452 billion and are expected to stay flat amid tax cuts. And the IRS says AI is enabling it to better spot fraud—a good thing, as the Budget Lab at Yale estimates cuts to the agency could cost up to $2.4 trillion in net foregone revenue over 10 years.
National Security: DOGE targeted DEI initiatives, R&D, and State Department operations, largely sparing major contractors like SpaceX, which is run by Musk. While Trump’s 2027 budget calls for a 40% increase in military spending to $1.5 trillion, some worry that DOGE cuts have reduced cybersecurity readiness and America’s ability to conduct agile and accurate combat missions. But national security has long been more about soft power than brute force, as America is the largest funder of global health and humanitarian relief. Private donors have stepped up to help compensate for the gutting of the U.S. Agency for International Development (USAID), which researchers estimate has resulted in more than 600,000 deaths so far and could result in millions more by 2030. America’s role in protecting global shipping and the rules-based global order in which U.S. business thrived after WWII is under question.
The net impact of DOGE may never be fully calculated, good or bad. As one CEO told me this weekend: “It’s hard to separate DOGE from everything else that’s been done on the policy front or by other officials.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com.
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Market futures fluctuate on Iran war escalations
Futures for the Dow, S&P 500, and Nasdaq were down over the weekend and U.S. oil futures rose as President Trump threatened attacks on Iran’s power plants and bridges if the country doesn’t open the Strait of Hormuz. In the business world, Ryanair CEO Michael O’Leary warned in an interview with the U.K.’s ITV News last week that up to 10% of flights in May, June, and July may have to be canceled if the war continues.
The markets
Many major markets in the U.S., Europe, and Asia have been closed for a holiday weekend. S&P 500 futures are up 0.25% this morning. Thursday’s session closed up 0.11%, and U.S. markets reopen today. The STOXX Europe 600 closed down 0.18% and the U.K.’s FTSE 100 closed up 0.69% Thursday; both remain closed through Monday. Japan’s Nikkei 225 was up 0.55% today. China’s CSI 300 was down 0.85% Friday and closed Monday. Hong Kong’s Hang Seng was down 0.70% Thursday and closed Friday and Monday. South Korea’s KOSPI was up 1.36% Monday. India’s NIFTY 50 is up 1.12% today. Bitcoin is up over $69K.
Around the watercooler
3 reasons OpenAI buying daily tech show TBPN for hundreds of millions isn’t totally crazy by Alyson Shontell
Microsoft just turned 51. Here’s a look at an iconic 1978 photo of its first employees and where they are now by Marco Quiroz-Gutierrez
The U.S. military set up an improvised airfield deep inside Iran to rescue the F-15 airman. Marines just practiced building one in the desert by Jason Ma
DOGE gutted major energy personnel who warn the U.S. has lost key insights amid Iran war by Sasha Rogelberg
Netflix cofounder says he stopped work at 5 p.m. every Tuesday for 30 years to stay ‘sane,’ no matter the crisis by Emma Burleigh
CEO Daily was curated and edited by Joey Abrams and Lydia Belanger.
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