To theorize how modernization could enable the Department of Government Efficiency (DOGE) to achieve a $1 trillion cost-cutting goal in 2025, it is crucial to consider the federal budget context, modernization strategies, and their potential impacts. The federal budget is approximately $7 trillion annually, meaning that $1 trillion in cuts would represent about 14% of total spending. As of May 2025, DOGE's current savings are reported at $160–165 billion, which significantly falls short of the target, prompting a scale-back to a more pragmatic goal of $150 billion. This discussion outlines how modernization—through technology, process optimization, and structural reform—could theoretically enhance savings while addressing feasibility and challenges.

Firstly, automation and digital transformation present opportunities for substantial savings. The modernization of federal IT systems and the automation of manual processes could lead to reductions in labor costs, the elimination of redundancies, and improved agency efficiency. For example, back-office automation through AI and robotic process automation (RPA) could streamline tasks like procurement and payroll. The IRS, which processes millions of tax returns manually, could automate up to 80% of routine filings, thereby reducing staffing needs. Additionally, transitioning legacy systems to cloud platforms could save the Department of Defense (DoD) between $10 to $20 billion annually. The Government Accountability Office (GAO) estimates that federal IT modernization could save between $50 to $100 billion annually. However, the challenges associated with upfront costs for AI and cloud infrastructure, resistance from unions and employees, and cybersecurity risks need to be addressed.

Secondly, streamlining procurement and contracting through data analytics and blockchain technology could significantly reduce waste and fraud. Implementing AI-driven procurement could analyze vendor bids for overpricing, potentially saving the DoD $40 billion from its $700 billion budget. Furthermore, adopting blockchain for transparency in contract spending could significantly reduce fraud in programs like Medicare, where fraud accounts for $40 to $80 billion annually. The potential savings from cutting 10–15% from the $600 billion annual federal contract spend could yield $60 to $90 billion, yet vendor resistance and the need for significant investment in blockchain technology present challenges.

Thirdly, program consolidation and elimination could enhance efficiency. By utilizing modern data analytics to identify overlapping or ineffective programs, the government could consolidate or eliminate redundancies. For instance, the GAO identifies over 1,700 federal programs, with many addressing similar issues like homelessness. Consolidating just 20% of duplicative programs could save around $100 billion. However, political pushback from beneficiaries and the complexity of data integration across agencies could hinder these efforts.